💡 Bitcoin hovers above $27,5. Bitcoin is expecting new volatility. Over $100 million in liquidation losses have been experienced by crypto traders. Ethereum's value has decreased following the Ethereum Foundation's conversion of $2.7 million worth of ETH. Web3 platform Galxe hit by DNS attack on front-end website. Sui Foundation to allocate 117 million SUI for ecosystem development.
Bitcoin (BTC) has displayed relative stability compared to other tokens, registering a modest 1% decline over the past 24 hours and maintaining its position above a crucial support level of $27,500 during the Asian morning hours on Tuesday. This stability comes as traders closely monitor riskier assets like technology stocks and Bitcoin, particularly in light of the escalating oil prices.
From a technical perspective, Bitcoin remains in an upward trajectory but encountered resistance at its 200-day moving average over the weekend.
In the options markets for both Bitcoin and Ether, the bid-ask ratio has tilted below one, indicating a preference for selling volatility. This suggests an anticipation of decreased market volatility in the near term.
Furthermore, the order books for Bitcoin and Ether options are skewed towards asks, which also signifies a predisposition for selling options. This bias toward selling options implies an expectation of continued subdued volatility in the market.
The first week of October witnessed a notable upswing in Bitcoin's volatility, prompting analysts to project its persistence throughout the remainder of the month. Since the outset of October, Bitcoin's average volatility has exceeded that of the past 200 days, marking a significant departure from its historical performance.
In addition, the report underscores the ongoing trend of heightened volatility events in Bitcoin and other cryptocurrency assets. Historical volatility consistently maintains levels above critical averages, exemplified by a remarkable isolated high volatility event on October 2nd, where 24-hour historical volatility surged by an astounding 340%.
Moreover, the options market is currently indicating a continuation of increased volatility for Bitcoin, consistent with past trends. Presently, the implied volatility rate stands at 37.8%, surpassing the historical volatility figure of 32.4%.
During Monday's market turmoil, cryptocurrency traders experienced significant losses exceeding $100 million in liquidations. The decline in digital asset prices, coupled with an escalating Middle East conflict, triggered this downturn.
Approximately $105 million worth of long positions, representing traders who had bet on price increases, were obliterated by the afternoon in the United States. This marked the highest volume of long liquidations observed in a single day since September 11.
Liquidations transpire when an exchange forcibly closes a leveraged trading position due to either a partial or total loss of the trader's initial capital, known as "margin." This occurs when traders fail to meet margin requirements or lack sufficient funds to maintain their positions open.
Notably, ETH derivatives traders bore the brunt of these losses, with approximately $33.36 million in long positions being liquidated. The most substantial single liquidation order recorded was a $4.5 million ETH-BUSD long position on the cryptocurrency exchange Binance.
Regenerate
Ether prices have recently experienced a 1.5% decline, with traders appearing to react to a wallet that appears to be linked to the Ethereum Foundation. This wallet reportedly sold a portion of its allocated tokens.
According to Arkham data, the wallet exchanged more than 1,700 ETH for $2.7 million in USDC on Monday. Notably, this wallet is identified as a "Grant Provider" on the blockchain tracker Etherscan and held tokens valued at nearly $400,000 as of Monday morning.
As of the time of writing, the Ethereum Foundation has not publicly disclosed its specific intentions for the proceeds from this sale. However, traders reacted to the development, causing ETH to extend its losses by 1.8% on Monday, leading a broader decline among major tokens.
It's worth noting that the Ethereum Foundation is responsible for developing applications and programs for the Ethereum network. While it is not an official entity or a centralized authority governing the blockchain, it wields significant influence that can impact token prices and shape the outlook of Ethereum among investors and developers.
As of April 2022, the Ethereum Foundation held a substantial amount of over $1.29 billion in ether (ETH), representing more than 0.297% of the total ether supply at that time, along with approximately $300 million in non-crypto investments.
he Domain Name System (DNS) of NFT infrastructure firm Galxe has experienced a security breach, resulting in the attacker's address currently holding $75,000 in digital assets.
In an announcement on X, Galxe acknowledged that its website was inaccessible and confirmed that its team is actively working to resolve the issue. The company also advised users not to link their wallet addresses to Galxe during this period.
Additionally, Polkastarter, a Web3 fundraising platform, posted a separate advisory urging users to revoke any permissions granted to Galxe. The stolen funds have been funneled to an Ethereum address, which currently contains almost $75,000 worth of assets.
As a consequence of this incident, the price of $GAL, Galxe's native cryptocurrency, has dropped by more than 2.2%, falling to a value of 1.16 following the news.
In other news, the Sui Foundation team has made the decision to redistribute a total of 117 million of their own SUI tokens. This allocation is intended to bolster and promote growth initiatives within the network.
Over the span of just four months, the Sui network has witnessed the participation of more than 6 million active wallets, with users engaging in approximately 65 million transactions in a single day. It's worth noting that the redistribution of these SUI tokens will not have an impact on the circulating supply, as they have already been issued and are currently utilized in various community programs.
The team's plan involves dedicating the 117 million SUI tokens to support the ecosystem by providing grants to developers. These grants are aimed at encouraging the creation of the next generation of decentralized applications and lending protocols on the Sui network.
Since the Sui network's mainnet launch in May 2023, the price of the SUI token has experienced a decline, dropping from $1.40 to its current value of $0.44.
Explore the highlights of the largest fundraising rounds in the third quarter of 2023, featuring active participation from Tier-1 crypto venture capital funds.
You can also explore the most notable raises of this week.
The target audience for this blockchain-based project is restaurant users, and it introduces its unique "Flypaper" and fungible FLY tokens.
Powered by Coinbase's Layer-2 Base blockchain, Blackbird allows customers to create a non-fungible token (NFT) membership by simply tapping their phone on an NFC reader, which is the device enabling smartphone connectivity to payment readers. The NFT is minted when users "tap in" at the restaurant.
To enhance accessibility, Blackbird has partnered with Privy, eliminating the need for users to have a pre-existing crypto wallet. Instead, they can sign in with their phone number, automatically gaining access to a self-custodial wallet.
Launched a few months ago, Blackbird has already onboarded approximately 80 restaurants in New York City.
Phaver's "Web2.5" mobile app made its debut in May 2022 during Lens's mainnet launch. This innovative app allows users to sign up using familiar Web2 logins, eliminating the need for a crypto wallet. It serves as a gentle introduction to Web3, allowing users to connect their on-chain Lens profile or showcase their NFT collection step by step. Phaver's app has already garnered over 250,000 downloads and boasts a passionate community that generates over 50,000 daily posts, solidifying its position as one of the most active applications in the Web3 landscape.
Decentralized social protocols like Lens empower users to create permissionless, non-custodial social media profiles, retaining ownership of their social connections and content while seamlessly moving between platforms. Unlike traditional Web2 social platforms where data is locked within a single app, a Lens profile remains secure and cannot be taken away or deleted. This creates a permanent blockchain-stored backup of a user's social connections, accessible across multiple apps.
As the first native mobile app on Lens, Phaver offers users a familiar interface and feature set, easing their transition into the world of Web3 social. This approach has propelled Phaver to become the largest Lens mobile app by a significant margin. Furthermore, Phaver Cred, the app's reputation system, has seen remarkable growth, with users connecting over 75,000 wallets, representing over $50 million in stored value, all within a few months of its launch.
Ostium Labs stands at the forefront of innovation as the trailblazer in the realm of decentralized perpetuals DEX. Our unique focus centers on Real World Assets, with a primary emphasis on commodities and foreign exchange.
This injection of funding marks a significant milestone in the project’s journey. It will serve as the cornerstone for the imminent launch of the flagship protocol—a groundbreaking achievement in the world of blockchain and decentralized finance. This protocol heralds the arrival of the first-ever decentralized, non-custodial perpetuals exchange designed exclusively for Real World Assets.
As we embark on this exciting venture, Ostium Labs’ team anticipate that the pioneering efforts will not only reshape the landscape of decentralized finance but also open up new possibilities and opportunities for users worldwide. The commitment to advancing the accessibility and utility of Real World Assets within the blockchain ecosystem is unwavering, and project team is excited to bring this vision to fruition with the support of the investors and partners.
The blockchain trilemma states that a distributed network has three main properties: scalability, security, and decentralization. In full, only two of these properties can be fully realized, while the third is "sacrificed."
The blockchain industry has prioritized security, favoring networks like Ethereum and Bitcoin. However, the inherent problem of scalability worsens as the number of users grows and remains a major obstacle to the mass adoption of the technology.
To overcome this barrier, new concepts and solutions are required. One possible approach is modularity, which, according to Vitalik Buterin and other experts, will define the architecture of blockchains in the medium and long term.
To ensure the uninterrupted operation of a decentralized network, it must perform three main functions:
In dynamic terms, it looks as follows:
The last two processes are closely related because without previous states, new transactions cannot be validated, and without consensus, data about new operations will not be added to the blockchain. That's why all validators must store the complete history of the network.
In most modern blockchains, all three tasks listed above are performed by all nodes, making such networks monolithic. This architecture primarily focuses on security but has its limitations, which we will discuss later.
In contrast to monolithic networks, there exists a modular blockchain model. It involves separating these functions into individual layers.
Each level represents a separate module designed to address specific tasks. These layers can be combined with each other.
Such a concept paves the way for specialization since adapted nodes tailored to specific tasks can be used to serve each level. This potentially enhances network scalability by optimizing nodes and adding new layers.
It's important to distinguish between a modular network and a modular ecosystem. The first term refers to projects that provide a composable layer of consensus and data availability, such as Celestia (although they may also support execution nodes).
On the other hand, the ecosystem, in a broad sense, includes solutions for transaction execution (like rollups), dispute resolution (various proof-of-concept concepts), and so on.
The concept of a modular blockchain is not entirely new to the cryptocurrency market, but its understanding has evolved over time. Some of the first successful projects in this direction were Cosmos and Polkadot, launched in 2019 and 2020, respectively. Initially, they positioned themselves as infrastructure for cross-chain interaction and relatively recently shifted their concept towards modularity.
A brief presentation of the blockchain trilemma is provided in the introductory part of the article. Vitalik Buterin formalized this concept in 2017, summarizing the shortcomings of existing networks at that time.
All subsequent "Ethereum killers" have aimed to solve the problem by offering new consensus mechanisms, data transmission and processing protocols, network architecture, and more. However, there is still no widely accepted answer to the challenge:
As monolithic blockchains continued to demonstrate an inability to break free from the blockchain trilemma, activity and development in this direction declined.
The new search vector has focused on modular networks and was shaped, on one hand, by the successful cases of Cosmos and Polkadot, and on the other hand, by second-layer solutions (L2) and the development of Celestia as a composable consensus layer.
Ethereum has become a key driver of interest in modular networks. Although the blockchain itself remains monolithic for now, the concept introduced by Buterin in 2021 envisions a gradual transition towards the separation of network functions among different types of nodes. The evolution of the network is described in more detail in the project's roadmap.
Despite Ethereum being only at the beginning of its journey, in the context of the L2 ecosystem of accumulator chains, the network can already be seen as an early prototype of a seven-module blockchain. The combination of the first and second layers largely shapes the vision of modular architecture as a whole.
Another equally important aspect has been the development of technologies necessary to ensure the security and efficiency of modular networks, as well as to simplify their development. Key solutions in this direction include:
These developments simplify the complex process of creating modular blockchains and building decentralized applications on top of them. Moreover, an entire ecosystem has grown around the concept of modularity, from RaaS (rollup-as-a-service) platforms to consensus layers and sequencer providers.
Since the layers of modular blockchains are separated and can be combined with the layers of other networks, there are solution providers for all primary and secondary functions. The technical ecosystem of modular networks is broader than that of monolithic counterparts and includes the following categories of projects:
At the same time, the core sector consists of foundational networks that provide their consensus layer. This layer is responsible for two aspects of the blockchain trilemma - security and decentralization - and it is the most challenging to build independently. Key projects at the foundational level include:
Networks like Polkadot or Cosmos offer (or are developing) solutions for inherited security and developer toolsets, so they can also be considered somewhat modular in nature.
Thus, in October 2023, there is still no fully-fledged modular blockchain in the market that would allow for the flexible combination of consensus, execution, and data availability layers. Celestia has come closest to implementing this concept, but only the mainnet launch will reveal how the project performs under real conditions and how valuable it proves to be for developers.
Conferences are a great opportunity to grab the attention of the whales in the crypto industry, spread the word about your project and win some funds! A quick line-up of the upcoming conferences below!
