2023-12-14 17:07

Celo originally planned to build its Ethereum layer-2 network with Optimism's OP Stack. Then Polygon and Matter Labs pitched their stacks. Now, Arbitrum, the biggest layer-2, wants in on the bake-off. The competition for who gets to build a new layer-2 blockchain for the Celo network just got a little more crowded. Nina Rong, the head of ecosystem development at the Arbitrum Foundation, submitted a proposal to the Celo community on Tuesday, suggesting that Celo pick Arbitrum’s Orbit tech stack, which builds customizable layer 2 and layer 3 chains based on Arbitrum’s optimistic technology. “The team at Arbitrum Foundation has been following the development of cLabs Proposal for Celo to transition to an Ethereum L2 closely and would like to welcome Celo back to the Ethereum community by proposing the Arbitrum Orbit tech stack as the path forward,” Rong writes. Celo originally planned in July to build its layer 2 with Optimism's OP Stack, a similar stack also based on “optimistic” technology. But since then, Polygon and Matter Labs have both pitched their stacks, which are based on zero-knowledge technology, to the Celo community. Celo has said it's aiming for mid-January to pick a stack to build its new chain on, giving time for community members to evaluate which is the best stack. “The Arbitrum Foundation is aligned with Celo’s mission to build a financial system that creates the conditions for prosperity for everyone,” Rong wrote in the proposal. Celo Labs, the primary developer behind the network, posted an update this week on its discussion-forum page saying that the team had "begun work on technical evaluations." "We’re focusing on learning first – understanding each stack and how it fits together, and familiarizing ourselves with the technology and its current state of production-readiness," the update reads. The post included a preliminary assessment of the pros and cons of the various proposals – including the one from Arbitrum, "hot off the press," as the team put it. A notable fact about Arbitrum is that it's the largest layer-2 based on the key metric of "total value locked," or TVL, which represents deposits locked into decentralized-finance protocols on any given network. The figure currently stands at $8.4 billion for the Arbitrum One network, according to the website L2Beat, almost double No. 2 OP Mainnet's $4.6 billion. "Arbitrum has the largest TVL of any L2, which is relevant insofar as it speaks of the trust earned by Arbitrum in the market," according to the post from the Celo Labs team. https://www.coindesk.com/tech/2023/12/14/arbitrum-throws-hat-in-ring-for-celos-migration-to-layer-2-blockchain/

2023-12-14 16:47

The latest crypto exploit, affecting security firm Ledger and a number of popular DeFi protocols, is a moment of levity for some. Multiple Ethereum-based applications including Zapper, SushiSwap, Phantom, Balancer and Revoke.cash were compromised early Thursday due to a Ledger security breach. Ledger, the Paris-based crypto hardware wallet manufacturer, said it has fixed the malicious code as of 13:35 UTC — the company also warned users to “Clear Sign” transactions, a way to ensure you are interacting directly with the company’s website and software. It’s not yet known how many decentralized apps (dapps) were/are affected, or how much money has been lost. Anecdotal reports on social media suggest the exploit is widespread. Blockaid, a blockchain security firm, said upwards of $150,000 in crypto had been lost due to this unique “supply chain attack” on Ledger’s Connect Kit, which is deployed across the decentralized finance (DeFi) ecosystem. “Do not interact with ANY dApps until further notice,” Sushi Chief Technology Officer Matthew Lilley wrote on X/Twitter, one of the first people to acknowledge the attack. “It appears that a commonly used Web3 connector has been compromised, which allows for injection of malicious code affecting numerous dApps.” Hacks are a common occurrence in crypto, especially in the free-wheeling world of decentralized finance (DeFi), where financial software is frequently deployed without the appropriate level of auditing and testing as well as used by people without the knowledge to do proper due diligence. Centralized entities, aka companies, like Ledger, are also common targets for assaults. These types of breaches are a stain on the industry, affecting not only actual people and projects but also crypto’s reputation. Internet pioneer and security expert Steve Gibson keeps up with the litany of crypto hacks on the popular podcast, “Security Now,” he co-hosts with fellow tech legend Leo Laporte, and recently said any industry where there is a running tally of the largest hacks should be treated with extreme skepticism. Still, there is sometimes a silver lining to crypto exploits. These events, however blackening, can also be moments of levity, and a chance for seasoned crypto professionals to showcase their skills and the built-in benefits of blockchain. Most crypto transactions cannot be reversed, but attackers can end up in a dead-end trying to actually capitalize on their ill-gotten gains. Tether, the largest stablecoin issuer, for instance, announced it froze the explorer's address hours after the hack, which speaks to the ability for on-chain sleuths to track down and put pressure on attackers. So, is it too soon to laugh about it? Just last week, CoinDesk listed Ledger CEO Pascal Gauthier and several of the impacted DeFi protocols on its annual Most Influential list — perhaps we can laugh about the inauspicious timing. But that’s the thing about open-source development that happens in the public eye, even the worst moments can hold valuable lessons for all. On social media, the breach has become an occasion to joke, condemn and learn: https://www.coindesk.com/consensus-magazine/2023/12/14/what-we-know-about-the-massive-ledger-hack/

2023-12-14 15:53

Like it or not, dog tokens are driving big business in the crypto markets. Dumb money is roaring back into the crypto markets, with one trader turning $1,000 into well over $100,000 by betting on, of all things, a token whose mascot is a dog wearing a beanie. Pseudonymous crypto enthusiast Blockgraze told CoinDesk he bought the memecoin Dogwifhat (WIF) in late November, shortly after it debuted on the Solana blockchain's DeFi markets. "I thought the dog with the hat was very funny and so I bought some," he said, noting he's since realized $25,000 in profits while letting the rest of his gamble ride in his wallet. And a gamble it truly is. Anyone can spin up a cryptocurrency, create a market for it and hope it catches some bids. But those associated with memes, and particularly with memes of the shiba inu dog breed, have a tendency to balloon in value and sometimes even endure. That much was true of Solana's top memecoin, BONK. It launched last Christmas in an airdrop and quickly rallied before dying down. It began climbing again in October and just this week got listed by Coinbase, signaling how funny money can yield big business. Still, 100x memecoin trades are more luck than skill, said Blockgraze, a part-time crypto trader who said he works with consumer startups. He compares it to gambling. "The secret is to be an idiot I think," he said. "I should have probably sold several times, but the dog had a hat." https://www.coindesk.com/markets/2023/12/14/crypto-trader-turns-1k-into-100k-on-solanas-newest-memecoin-dogwifhat/

2023-12-14 12:48

The exploit reportedly prompts users to connect their wallets via a pop-up, triggering a token drainer. Sushi's Chief Technology Officer warned of an industry-wide exploit related to a Ledger's Connect Kit as the decentralized finance (DeFi) protocol was hit by a front-end exploit. Ledger, a maker of hardware wallets, provides Connect Kit software that decentralized finance protocols such as Lido, Metamask and Coinbase, along with Sushi, use to connect decentralized applications (dapps) to its products. By compromising the front end of a website or application, hackers can alter functions users see and con them into inadvertently sending cash to the exploiters rather than their own wallets. “Do not interact with ANY dApps until further notice,” Sushi CTO Matthew Lilley wrote on X. “It appears that a commonly used web3 connector has been compromised, which allows for injection of malicious code affecting numerous dApps.” The exploit reportedly prompts users to connect their wallets via a pop-up, which then triggers the token drainer. Issues have also been reported across other DeFi websites, including Zapper and RevokeCash. Five hours after the hack, Ledger published a post-mortem on X. It confirmed that a former Ledger employee fell victim to a phishing attack, which allowed a hacker to insert malicious code into Ledger's Connect Kit. It adds that the code has now been removed and stablecoin issuer Tether has frozen the hacker's wallet. "We've identified a critical issue the ledger connector has been compromised, potentially allowing the injection of malicious code affecting various dApps," Sushi wrote in a statement. "If you have the Sushi page open and see an unexpected 'Connect Wallet' pop-up, DO NOT interact or connect your wallet." One X user pointed out that Ledger’s library had been compromised and replaced with a token drainer. Ledger said it had "identified and removed a malicious version of the Ledger Connect Kit." "A genuine version is being pushed to replace the malicious file now," Ledger said. "Do not interact with any dApps for the moment. We will keep you informed as the situation evolves. Your Ledger device and Ledger Live were not compromised." https://www.coindesk.com/business/2023/12/14/defi-protocol-sushis-cto-warns-of-possible-exploit/

2023-12-14 10:09

The Basel Committee for Banking Supervision wants to tighten requirements that allow stablecoins to qualify as less risky than unbacked cryptocurrencies like bitcoin. The Basel Committee for Banking Supervision (BCBS) proposed revisions to the criteria for allowing stablecoins to be treated as less risky than unbacked cryptocurrencies such as bitcoin (BTC) in a consultative document published Thursday. CoinDesk reported last week that the global banking regulator was looking to revise its classification criteria for stablecoins, which are cryptocurrencies designed to hold their value on par with reserve assets like the U.S. dollar. The consultation, released Thursday, lays out the proposed revisions in detail. The standard-setter has so far taken a tough stance on crypto, recommending the maximum possible risk weight of 1,250% for free-floating digital assets like bitcoin, which means banks have to issue capital to match their exposure. Banks are also not allowed to allocate more than 2% of their core capital to these riskier assets. The BCBS will not be making any changes to these standards, it said in a statement. However, cryptos with "effective stabilization mechanisms" qualify for "preferential Group 1b regulatory treatment." This means stablecoins can be subject to "capital requirements based on the risk weights of underlying exposures as set out in the existing Basel Framework," instead of the tougher requirements set for bitcoin and the like. Right now, stablecoins must be "redeemable at all times" to qualify for this preferential regulatory treatment. This ensures "only stablecoins issued by supervised and regulated entities that have robust redemption rights and governance are eligible for inclusion," the BCBS has said. This story will be updated. https://www.coindesk.com/policy/2023/12/14/global-banking-regulator-proposes-changes-to-criteria-that-give-stablecoins-preferential-risk-treatment/

2023-12-14 09:00

The new "Cronos zkEVM chain" is launching initially as a test network, based on Matter Labs’ software tools, which can be used to spin up new layer 2 and layer 3 “hyperchains” atop Ethereum. Cronos Labs, the developer behind the Cronos blockchain, announced Thursday the launch of a new layer-2 network, joining the growing ranks of second-tier projects that have opted to build auxiliary networks within the dominant Ethereum ecosystem. The new "Cronos zkEVM chain" is launching initially as a test network, based on Matter Labs’ software tools, which can be used to spin up new layer 2 and layer 3 “hyperchains” atop Ethereum. The testnet, powered by zkSync’s ZK Stack software kit developed primarily by Matter Labs, will add a new chain to Cronos’ existing ecosystem, currently consisting of the Cronos EVM blockchain, and Cronos PoS chain. The crypto exchange Crypto.com is a partner with Cronos Labs, according to its website, contributing to the source code of the PoS chain. It is also the first public testnet making use of Matter Labs’ ZK Stack, according to a press release. Cronos zkEVM mainnet will follow, aiming for the network to be up in the second quarter of 2024. "Seeing a layer 1 like Cronos being the first to make the move to deploy as a hyperchain is a great testament to the ZK Stack architecture,” Omar Azhar, head of business development head of Matter Labs, told CoinDesk over Telegram. “Cronos and Crypto.com have shown they are able to build an impressive community – currently an addressable user base of more than 80 million crypto users." Cronos, while a fraction of the size of Ethereum, the dominant smart-contract blockchain, nevertheless maintains a respectable rank among the top-20 projects, in a universe of primary blockchain networks that Messari numbers close to 200. According to DeFiLlama, Cronos boasts some $354 million of total value locked, or TVL – a commonly used metric, similar to deposits, that analysts use to rank blockchains' relative stature in decentralized finance. That's good for a No. 11 ranking in the industry, but still pales in comparison with Ethereum's $28.2 billion. The latest blockchain addition to the Cronos ecosystem is part of a wider trend of projects launching layer-2s, which is made possible through the easily available software stacks, also sometimes referred to as blockchain development kits. “The Cronos zkEVM testnet represents an opportunity for Cronos Labs and our partners, including VVS, Fulcrom and Veno, to experiment with ZK layer 2 technology in order to prepare the next phase of growth starting in 2024,” Ken Timsit, managing director of Cronos Labs, said in a press release seen by CoinDesk. https://www.coindesk.com/tech/2023/12/14/cronos-partner-of-cryptocom-to-start-layer-2-network-with-matter-labs/