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📣 News & Announcements
Celestia Kicks-Off the BlockSpace Race
March 7th marked the official launch of Celestia’s “Blockspace Race”, the network’s first incentivized testnet.
Why is this a big deal
Although we are now starting to see the rise of more and more modular blockchains, this was not always the case. In fact, modular blockchains are a relatively new concept, as it wasn’t until 2019 that Celestia (or Lazy Ledger as it was known then) first introduced us to the “modular” thesis, following the launch of their first whitepaper.
Traditionally, we were accustomed to seeing monolithic blockchains, which take care of all blockchain duties within the same environment (execution, settlement, data availability, and consensus), however, Celestia introduced the idea of splitting the workload into multiple layers.
More specifically, this whitepaper explained the idea of separating data availability & consensus into its own layer, thereby removing the need to perform execution and settlement altogether, and instead outsourcing these other tasks from other networks.
Considering its been four years now since the release of that first whitepaper, it’s no surprise why a huge portion of the modular blockchain community is filled with anticipation.
Aside from that, there are projects that have to wait until Celestia launches before they themselves launch. One example is Eclipse, which is a sovereign rollup built on top of Celestia.
Details of the Blockspace Race
Altogether, about 20K applicants registered to take part in this event, however, only 1K were chosen to participate, which still makes this one of the largest, if not the largest, incentivized testnet launches to date.
The testnet will be broken down into two phases:
Phase 1: This phase kicked off the Blockspace Race (testnet) and is dedicated strictly to Celestia validators.
Phase 2: This phase is expected to happen a week from Phase 1 launch (probably by the time you’re reading this) and allows node operators to start entering the network (this includes light nodes & bridge nodes). This is huge, as it’ll be the first time we’ll see DA sampling take place in a large-scale network. According to the team, during this phase there will be several tasks and projects that the participants will be able to contribute to, such as working on developer tooling.
Highlights from Blockspace Race Twitter space
Following the kick-off of the Blockspace Race, the Celestia team held a Twitter space to go over the event details, as well as answer any questions from the community. Here were some of our favorite highlights.
IBC will be integrated into the Celestia testnet at launch, allowing users to start experimenting with bridging to and from the network. In fact, during their recent Twitter Space, they challenged anyone to try and bridge to Osmosis (do not try using real tokens!).
Aside from IBC connectivity, another exciting aspect that was mentioned during the Twitter Space was when one of the core Celestia engineers mentioned the development of a new “transaction type”. In short, this new transaction type will help pave the way for someone to build & launch a modular sequencer. This doesn’t do this feature enough justice, so if you’re interested in learning more about this, feel free to listen to the original recording (skip 28 minutes in).
What is Celestia
Celestia is a modular blockchain whose sole task is to receive, order, and store transaction data. Aside from introducing us to the modular world, Celestia was also popular for solving the “Data Availability problem”, which asked, how can nodes be sure that all the transaction data was published correctly whenever a new block is produced. Specifically, Celestia uses “data sampling” to accomplish this, but we’ll save the details about this for a future date.
Congrats to the entire Celestia team! We’re excited to see the continued growth from one of the leaders in the modular space. You can read the entire article to learn more about the Blockspace Race.
Coinbase Launches Wallet as a Service
Coinbase once again proved why they’re one of the best at onboarding new users to web3, as this past week the company announced “Wallet as a Service”, which comes just a couple of weeks after announcing “Base”, their own L2 chain.
What is WaaS?
Coinbase’s WaaS “is a scalable and secure set of wallet infrastructure APIs, enabling companies to create and deploy fully customizable on-chain wallets to their end users”.
This will allow traditional web2 companies (& even web3 ones) to create and integrate their own custom wallets directly on their website, using the team’s own branding, as well as its own set of custom features, such as an added loyalty program. However, unlike the traditional loyalty system that you see today, users will be able to sell/trade these loyalty points to others, thanks to the power of web3.
As mentioned earlier, Coinbase has been one of the best at onboarding new users into the space, and that doesn’t change with WaaS.
WaaS is meant to abstract away the concept of crypto altogether for the end user (they shouldn’t know they’re using a crypto wallet). One of the ways they are doing this is by removing the need for a seed phrase, and instead using a simple username and password log-in.
They’re able to offer this feature because of their use of Multi-Party Computation (MPC). MPC essentially splits a single key into multiple pieces. These pieces are then distributed to multiple parties so that even if one piece of the key is compromised or lost, the user won’t lose access to his/her funds.
So in this case, the key is split between the end user and Coinbase. If the end user loses his/her account, Coinbase can still retrieve access. That said, the end user will also have the option of retrieving his/her assets under their own account, and removing it from the possession of Coinbase entirely.
Potential Use Cases
digital storefronts: any existing store would be able to integrate its own custom wallet within its website. Whenever a new user signs up for an account with that particular online store, they’ll be assigned a web3 wallet. As mentioned, each company can add its own custom features, like a loyalty program. Whenever the user buys something from that online shop, they’ll be assigned loyalty points, which can then be used to access exclusive benefits, or can be sold or traded to others.
Games: any existing web2 or web3 game can launch its own wallet using WaaS. Again, this wallet can be customized to the branding of each specific game, and will enable players to actually take ownership of their in-game assets. Meaning they’ll be able to sell or trade any character skins, in-game “credits”, and everything else.
To learn all about Coinbase’s new Wallet as a Service, you can check out the complete article.
Scroll Raises at a $1.8 Billion Valuation
On March 6th, Scroll announced a $50M funding round that valued the company at $1.8B. This round included some huge names in the VC space, such as Polychain, Variantfund, The Spartan Group, Sequoia, Bain Capital, and others. According to “The Block”, Scroll had previously only raised $33M in funding across two rounds, making this most recent one the compani’s biggest raise yet.
As a reminder, Scroll is an Ethereum L2 network based on the use of zk-technology.
The funds will be used to:
progress the companies development into mainnet launch
introduce a public goods and grants program
continue further research on decentralized provers and sequencing networks
This announcement came just a week after the company announced its testnet launch (you can check out our post from last week to learn more about that), where already they have managed to reach over 790K unique wallet addresses, and over 3.3M transactions.
The crypto industry has had a rough past couple of months, but even in this type of environment, it’s amazing to see Scroll raise at such a high valuation. Congrats to the entire Scroll team!
Proven Raises $15.8 Million
On March 9th, Proven announced its $15.8 funding, in a round led by Framework Ventures. According to official reports, the funds will be used “to further expand its development team and scale its world-class zero-knowledge-based technological infrastructure”.
Proven is a team working on zero knowledge (zk) solutions to help provide services like “proof of solvency” for exchanges. To be more specific, Proven specializes in producing zk-proofs, which are a special type of cryptography that proves something is true, without actually disclosing the contents within the proof.
So for example, exchanges will be able to prove to the world that they own enough assets to cover liabilities (there’s enough money in the bank), without actually having to disclose the assets themselves or who owns what.
While most projects today are using zk-proofs for scaling purposes (StarkWare, Polygon, zkSync, etc.), zk-proofs can also be used to provide privacy-enhancing features. Popular examples of such projects include Aztec, who are working on private peer-to-peer (P2P) transactions, and PolygonID, which is allowing users to prove their personal statements/documents without actually disclosing the content within those statements.
When we think back to all the crypto exchange collapses over the past year, we can see that the reason for their collapse was due to essentially not having the correct amount of customer deposits. However, a lot of these collapsed exchanges ran out of money long before we users actually found out, and this is the problem Proven is trying to help tackle.
Whether it’s an exchange like FTX, an investment firm like 3AC, a stablecoin like USDC, or even a traditional bank like SVB, there are tons of use cases for Proven’s solutions.
Congrats to the Proven team!
More News & Updates
The Ethereum Foundation published the official date and time for the launch of the Shapella upgrade on Goerli testnet, in what “is expected to be the last testnet upgrade before scheduling Shapella for the Ethereum mainnet.” This of course brings us one step closer t beacon chain withdrawals.
Stackr joins the latest cohort of a16z’s crypto startup school, which featured over 8K applicants!
Covalent announced their integration of the Arbitrum Network, allowing users to start accessing historical data for both Arbitrum One (Defi & NFTs), and Arbitrum Nova (Gaming & Social).
For any web3 gamers, Saga will be unveiling the “Saga Multiverse” on March 22nd during a special event. You can sign up today to catch it live.
Aztec and Aragon co-author a proposal to enable private voting for NounsDAO governance moving forward.
In a mission to be more transparent, Sovereign will now start publishing regular progress updates. You can catch the first update post here.
Mintify, a modular trading terminal for NFTs, is now live on Polygon
Acentrik, which is the enterprise data marketplace platform (decentralized data exchange) built by Mercedes-Benz, just deployed on Polygon
Compound v3 has been deployed on Polygon
Reddit Avatars surpass $50M in market cap
Uniswap drops a limited, early-release version of its new mobile app during ETHDenver
A couple of weeks ago, we mentioned that Arbitrum was the leading Ethereum L2 in terms of monthly transaction settlement volume, however, it looks like StarkEx was actually the network to hold this title
Users can now join the waitlist for Hashtack’s upcoming mainnet launch (expected this month)
Celer Network, a cross-layer communications protocol, announced their upcoming launch on zkSync Era
Rhino Fi will be integrating zkSync Era, allowing users to bridge to the network via BNB, Polygon, Arbitrum, and Ethereum
Instadapp introduces Avocado wallet, an Account Abstraction wallet that’ll enable users a seamless multi-chain experience, without having to think of what network gas token to use
Starknet <> Rollkit <> Celestia: Last week, @ammarif_ used Rollkit to launch a sovereign rollup on top of Celestia using the Cairo VM (the virtual machine used in the StarkWare)
Arbitrum adds a new bridge feature, giving users the ability to view their transaction history going back over a year ago
The Coinbase wallet now offers Optimism-focused quests. This is a good way for those new to Optimism to explore its ecosystem while getting rewarded with OP. The first quest involves simply swapping ETH.
Taiko, who are building their own zkEVM-powered rollup, shares its new roadmap as they approach mainnet launch
“On March 15th, the Lambda upgrade will take place on Cosmos Hub”, which will activate the replicated security feature and introduce interchain security. In short, this will allow other app-chains to bond ATOM tokens in order to borrow security from the hub
Rollkit announces “Let’s Roll”, a community-driven meeting meant to share knowledge, explore ideas, and discuss the latest updates. The first community call takes place on March 21st
Convex Finance expands to Polygon
Lido expands its wstETH token to the Polygon network
Users can now start bridging their testnet ETH from Goerli to Polygon’s zkEVM, using Orbiter Finance
📚 Discussions & Education
What are sovereign rollups on Bitcoin?
Last week we covered Rollkit (a rollup SDK developed by the Celestia team) enabling Bitcoin as a DA layer option. The announcement post blew up on Twitter, garnering over 1 million views and sparking hundreds of discussions 🤯
Let’s start with the basics. What’s a sovereign rollup and what does it mean to be sovereign rollup on Bitcoin?
Celestia walks through the basics of sovereign rollups and does a good job contrasting them with the “classic” rollups you might be used to. They also have a more in depth post on the concept.
Wait a minute - sovereign rollups on Bitcoin? Doesn’t the Bitcoin community frown upon “alt” assets and other blockchain use cases? How’d rollups come into the picture?
We actually touched on it a few weeks ago, but as a refresher:
Inscriptions AKA Bitcoin NFTs brought attention to Bitcoin “blobspace”
Eric Wall gave a talk on how Bitcoin blobspace can be used to build sovereign rollups
This unlocks Bitcoin as a data availability layer
Without getting too technical, here’s how it’d work:
So are Bitcoiners on board with this idea?
TBD - they are now open to discussion about sovereign rollups, but it’s unclear whether the community will embrace or reject them.
What is clear, however, is that Rollkit has made implementing them much easier.
Do Bitcoin sovereign rollups inherit Bitcoin security?
Daniel from Arbitrum makes a strong statement - sovereign rollups inherit L1 DA guarantees but do not inherit L1 security.
But what exactly does this mean?
Other builders weigh in too, with takes spanning the full range of “no-kinda-yes”:
Ryan Berckmans says sovereign rollups sound like L1s and aren’t “real” rollups or L2s
Nick from Celestia says sovereign rollups are not trying to be L2s or scale the underlying L1
Toghrul from Scroll says sovereign rollups at most inherit some L1 security
Sreeram from EigenLayer says sovereign rollups can inherit up to all 4 security properties of L1
So which is it? What do sovereign rollups inherit?
Sreeram Kannan offers an excellent framework to think through the question:
We highly recommend reading his thread, but here are our takeaways:
Blockchain security has 4 properties (listed in the above tweet). It’s a more nuanced topic than many people make it seem.
An attacker would need to corrupt Bitcoin to mess with the order (a) and availability (c) of transactions. This security is achieved by simply posting transaction data on Bitcoin - pretty straight forward.
Censorship resistance (b) is rock solid if the sovereign rollup users can submit transactions directly to Bitcoin. As made clear above, once the transaction hits L1 it’s safe and there are ways to make sure it gets executed.
Validity (d) is inherited in some scenarios, but not others. If you are running a rollup node, you get state transition security for assets on the rollup. However, you don’t get state transition security when bridging assets between the rollup and Bitcoin.
What does Bitcoin look like as a DA layer?
Since Bitcoin can technically serve as a DA layer, let’s consider a couple of other questions:
Would it make a “good” DA layer?
If it becomes one, are there drawbacks?
The above tweet by Mustafa (whose team built Rollkit!) hints at the answer “no” to the first question, but let’s consider the pros and cons.
High economic security
Easy to verify
Long block times (translates to slower rollup finality)
Slow data throughput (again, slower rollup finality)
Doesn’t support smart contract rollups (can’t verify proofs)
What else is there to consider? Other community members (from both Bitcoin and Ethereum) point to drawbacks, even if Bitcoin rollups were to success:
Ryan Berckmans says Bitcoin rollups will actually discredit the Bitcoin meme
Eric Wall says rollups might introduce MEV challenges to Bitcoin
The drawbacks are clearly speculative (and controversial) but worth thinking about in advance.
Either way, Bitcoin is getting more exciting ⚡️
Just a handful of the many awesome panels and presentations from the week
“Shared Security Summit” presented by Babylon and EigenLayer
Here are a couple of threads that include ETHDenver presentations that featured members of the zkSync team. Here are the talks regarding hyperscalability, security, and account abstraction
“Data availability in blockchain uncloak” panel with builders from Celestia, EigenLayer, StarkWare, Sui and Liberty Gaming Kit
“Zero Knowledge Virtual Machine” presentation by Jeremy Bruestle from RiscZero
“Commitments and Privacy in the MEV Supply Chain” presentation by Robert Miller from Flashbots
“Account Abstraction” presentation by Yoav Weiss from the Ethereum Foundation
“Scaling Ethereum for Global Adoption” panel with builders from Optimism, Filecoin, Coinbase and Lens
“Fully on-chain games” presentation with Nicolas Laurent
“Enter the Modular Playground” presentation by Yaz Khoury from Celestia
“Polygon zkEVM Mainnet” presentation by Jordi Baylina from Polygon ZK
“Scaling Ethereum with Rollups and Zero-Knowledge Proofs” presentation by Orest Tarasiuk from Scroll
“App-Specific Rollups” presentation by Matt Katz from Caldera
“Cartesi Agnostic Modular Execution Layer” presentation with Abdelrahman Omran from Cartesi
“Bringing Linux to the Ethereum Ecosystem” presentation by Max Hatesuer from Cartesi
“Doing Decentralized Identity Right” presentation by Kelvin Fitcher from OP Labs
“Babylon: Bitcoin Security for All” presentation by David Tse from Babylon
“The Limits of L2” presentation by Martin Koppelmann from Gnosis
Series of Bankless interviews, including “Cosmos Ecosystem” with Sunny from Osmosis, “Polygon’s zkEVM” with Jordi from Polygon ZK, “The State of EigenLayer” with Sreeram from EigenLayer, and the “L2 Wars” with Steven from Arbitrum
More Discussions & Education
@lemniscate says that L2s need more than one entity operating sequencers to be decentralized and @dankrad disagrees, saying L1 can act as the decentralized sequencer if anyone can submit transaction bundles
@sreeramkannan explains how L2 finality can be faster than Ethereum finality using a “pre-settlement” layer built on EigenLayer
@jon_charb responds to @koeppelmann's "Limits to L2s" talk, explaining how many of the problems can be addressed
@koeppelmann illustrates how EIP-4337 offers another way to include “meta transactions” on chain
@0xJim explains “modular interoperability”, framing the three components and where individual solutions fit
@kinaumov breaks down the EigenLayer protocol and example use cases
@arjunbhuptani explains “the messaging bridge stack”, including bridge basics and takeaways for better bridge security
OP Labs walks through the technical vision for the Superchain
@bertcmiller says the FCFS approach to transaction ordering is bad for censorship resistance
@sanjaypshah explains why sovereign rollups have underrated security benefits
Optimism explains how the OP Stack fits in the crypto ecosystem
Sovereign Labs explains how sovereign ZK rollups can achieve fast finality by creating and distributing proofs to light clients before the batch proof is generated
@CannnGurel highlights how L1 smart contracts are not needed to enforce a rollup’s fork choice rule, referencing the Sovereign Labs thread 👆
@colludingnode explains how the experience might work for users interacting with numerous sovereign rollups
@toghrulmaharram clarifies that L2s can implement fee markets (e.g. Fuel can do this easily) and Ethereum can increase DA capacity
@looksrare_eth explains RiscZero, its benefits and example use cases
@0xDinoEggs (👋) writes an article about “Light nodes and their benefits”
0xResearch releases an episode on “How zkSync and Argent 10x Ethereum’s UX”
Bell Curve releases an episode on “How Bitcoin Will Secure The Appchain Future” with builders from Rollkit, Babylon and Stride
zkSync clarifies that Optimism’s Superchain vision is very similar to their own Hyperchain vision
Arbitrum writes a post on the ETH research forum, analyzing how optimistic rollups could safely reduce the 7 day challenge period
L2Beat explains how the forced withdrawal mechanism works on dYdX’s StarkEx instance
@BigBrainKasey writes an article on Dymension, discussing the protocol, use cases, competitive solutions and more
@drakefjustin writes a post on the ETH forum, highlighting a special subset of rollups called “based” or “L1-sequenced”
Taiko explains how they think about and are implementing “based rollups”, referencing Justin’s post 👆
The Defiant releases an episode “Everything You Need to Know About EigenLayer” with Sreeram Kannan
Celestia releases an episode discussing Modular Cloud and their block explorer for modular blockchains
@0xSalazar explains how the zkEVM underlying tech works in depth
Starknet hosts a community call discussing the SHARP proving system
That's all for this week! Thanks for reading 🧱🎬
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