'Severe' Bug Found in Core Library for Ethereum and ETC

https://decrypt.co/48084/severe-bug-found-in-core-library-for-ethereum-and-etc

Mining pool 2Miners recently discovered a bug affecting Ethereum’s “epoch switch,” a term for when the network moves from a set of filled blocks (called an epoch) to a new, unfilled set, as per a blog post last week. The bug also affects Ethereum Classic, a hard fork of Ethereum.

Blockchains, despite what popular culture may compare to mere spreadsheets, are highly-complex mathematical structures that depend on several moving parts in order to operate seamlessly. This means any change, upgrade, or new development can spring up unforeseen consequences, which are usually accounted for, but can still miss the boat sometimes.

An upcoming fork on Ethereum Classic—the ECIP-1099 proposal, which cuts down on the network’s hashing power—reportedly caused the problem this time. 2Miners found that when the blockchain switched to its new epoch, mining pools were not validating the data (despite it being legitimate).

2Miners later found the bug to be in the core library used for maintaining both Ethereum and Ethereum Classic.

How a Dormant Bug Briefly Split the Ethereum Blockchain

“With thorough investigation, we have discovered that the math in one of the core libraries used in many Ethash-based cryptocurrencies is a little off,” the firm said. It explained that the code was using calculation values of 32 bits instead of the required 64 bits (the latter can store more numerical value).

The issue could have caused some nodes—individual servers that maintain the network—to accept newer data to the blockchain but some other nodes to not, creating a potentially drastic situation that could lead to a chain split (similar to Ethereum’s one the other day).

Ethereum Classic unveils a bold plan to keep its blockchain safe

Developers estimated that the problem would occur on January 1 for the Ethereum blockchain, but was already an issue for Ethereum Classic.

2Miners was able to identify and patch the issue for both blockchains. It worked with Ethereum Classic developers, who swiftly installed a fix on November 6. “Thanks for this. We are running a few sync tests and general otherwise sanity checks, but in general this looks good and unless we find something unexpected we’ll have it merged very soon,” a developer said, before the fix went live.

On Ethereum’s side, the mining company released two pull requests to mitigate the issue, one that Ethereum developers installed on November 11. An Ethereum blog post published the next day encouraged users to download a patch for both this issue alongside a further, unrelated critical vulnerability.

Ethereum’s had quite the week.

Polychain Capital Invests $8.2 Million Into Ethereum Token YFI

https://decrypt.co/47889/polychain-capital-invests-8-2-million-into-ethereum-token-yfi

Crypto fund Polychain Capital has picked up a further 141 YFI—the token that powers Yearn Finance—in a move yesterday that expanded on its investment in the decentralized finance (DeFi) protocol. The firm purchased 329 YFI just last week, and the token’s prices have jumped by more than 100% since then.

Yearn Finance has emerged as the quintessential DeFi project in the past few months, with the token boasting no pre-sale to venture capital firms or investors and its creator, Andre Cronje, holding no tokens at the time of issuance. This led to a positive narrative for the token among crypto circles.

That, combined with usability on the Yearn Finance protocol for usecases ranging from token swaps and automated investment management, to credit lending and loans, has propelled YFI into one of the fastest-growing cryptocurrencies of all time. Its launch in July saw YFI go from nearly $30 (excluding the free distribution to some early users of yEarn) to upwards of $42,000 in September—a 55,295% increase as per data on price tracker CoinGecko.

Yearn Finance ‘Manifesto’ Lays Out Leaderless DeFi Vision

But while the skyhigh prices didn’t last long—they have dropped nearly 80% since YFI’s peak—crypto funds like Polychain Capital have been making moves. The fund has picked up a total of 470 YFI this month alone, with its investment worth over $8.2 million at press time.

YFI’s low supply cap of just 30,000 tokens make Polychain Capital one of the largest holders of the token. The fund can now boast owning 1.6% of the entire supply, all purchased from the open market.

The low supply also makes the token susceptible to wild price swings. YFI went from its issuance to an all-time high in under two months, it then fell to $7,300 in the months after, before rising to its current price of $17,400 in five days.

The Mirage of Emojis Delivering Million-Percent Yields

But those moves don’t seem to faze investors. A host of upcoming features on Yearn Finance, such as lower fees, support for staking on Ethereum 2.0, and the purchase of decentralized options, has kept the demand (and hope for higher prices) up.

YFI prices increased by over 100% in the past week. Image: YFI/USD on TradingView

At least until the next bear market.

Coinbase Listing Pushes Ethereum-based Coin up 800%

https://decrypt.co/47852/coinbase-listing-pushes-ethereum-based-coin-up-800

A listing on Coinbase has revived an altcoin’s price from its slumber. The major US exchange listed governance token district0x (DNT) in a surprise announcement on November 6, pushing its price skyward within hours at the time, by 797% on Tuesday.

DNT zoomed from $0.0088 a day prior to the listing, to over $0.079 yesterday. Traders have since taken profits and driven prices down to $0.062 (still a nearly 600% increase for those who didn’t sell yet).

The altcoin was one of the most-hyped cryptocurrencies back in 2017, with its ability to allow users to create decentralized marketplaces (or districts). This caused its prices to surge to an all-time high of $0.50 in January 2018. A fantasy environment was a big part of the district0x premise—its token was required for application to the “District Registry” and used to signal support or disapproval for proposals made by other network participants.

A Coinbase listing pushed district0x prices by nearly 800%. Image: DNT:USD on TradingView

But the multiyear bear market flushed such stories out. The DNT token went on to nosedive with few platform users and no use for its tokens. The price fell to just $0.002 in May this year, before seeing a brief comeback as the decentralized finance (DeFi) sector started to become a leading narrative in crypto.

Why the ‘Coinbase effect’ on crypto is a temporary high

Last week’s Coinbase listing truly revived its price. The phenomenon, colloquially known in crypto circles as the “Coinbase effect,” sees altcoins often experience an immediate pump in value whenever news of their listing on the San Francisco exchange is released. This is partly due to the bourse’s strict regulatory and compliance policies as put by the US government, with a listing signaling a stamp of approval (at least on paper).

District0x was joined by Civic (CVC) and Decentraland (MANA)—also two fallen altcoins from the 2017 hype with the former’s token used to power digital identity and the latter used to power a so-called “virtual reality platform” marketplace—in Coinbase’s listing last week. They got the Coinbase treatment similarly.

Decentraland, Dragon City and the rise of NFTs in China

While CVC pumped to a high of $0.173 from $0.025 pre-listing (a 592% increase), MANA only gave investors a relatively small 60% pump from the listing date to today—from $0.06 to a high of $0.113 on Tuesday.

The Coinbase Effect didn’t seem to affect Decentraland’s prices by much. Image: MANA:USD on TradingView

The pump’s not likely to last either. Research by on-chain metrics firm Coin Metrics from earlier this year suggested the Coinbase effect dies out over a 100-day period, with most gains coming in the first ten days and then leveling out to reflect a “trend in the broader” crypto market.

Expect crypto traders to be chasing the next Coinbase pump by then.

Ethereum User Spends $9,300 in Fees to Send $120

https://decrypt.co/47293/ethereum-user-spends-9300-in-fees-to-send-120

An Ethereum user accidentally spent $9,300 in transaction fees to send just $120. They are now calling for miners to altruistically give the money back—although they are no requirements for them to do so.

A pseudonymous account known as “ProudBitcoiner” posted their experience on Reddit, posting a link to the transaction to verify it. The Ethereum user said they erroneously typed in the wrong transaction fee while trading—accidentally spending 23 Ethereum (ETH). Transaction fees are paid in “Gas” and numbered in “Gwei,” a system that can be unfamiliar and confusing to use.

A huge transaction fee
The transaction fee was significantly higher than the payment. Image: Etherscan.

The transaction was made through MetaMask, a popular in-browser Ethereum wallet, while the user was using the Uniswap exchange to swap tokens. It was scooped up by mining firm Ethermine in under 30 seconds (miners tend to prioritise transactions with higher transaction fees).

“Metamask didn’t populate the “Gas Limit” field with the correct amount in my previous transaction and that transaction failed, so I decided to change it manually in the next transaction (this one), but instead of typing 200000 in “Gas Limit” input field, I wrote it on the “Gas Price” input field, so I paid 200000 Gwei for this transaction and destroyed my life,” the user explained.

Fund transfers on the Ethereum network require a Gas fee to be inputted before any transaction. These are then paid to miners—entities who run powerful computing machines to keep a blockchain network running.

A Gas “limit” is the maximum amount of Gas that a user is willing to pay per transaction, while the Gas price is the amount of Gwei a user can spend on each unit of Gas. Together, the limit and price combine to set the fees per transaction on the Ethereum network and change continually based on network demand and activity. Hence the confusion.

For reference, data from tracking site ETH Gas Station shows that Ethereum fees are currently quoted at only around 24-33 Gwei per transaction, a fraction of what ProudBitcoiner ended up paying to Ethermine yesterday.

Meanwhile, the user is now trying to get some of the lost fees back. “I contacted Ethermine on Twitter, I contacted their CEO Peter Pratscher on Twitter, I made this post here … I am out of ideas,” they said in a post.

An Ethereum user lost $5.2 million in two massive mistakes

Ethermine, on its part, has not yet responded to requests made by the Reddit user and are not obliged to. Any typos during crypto transactions are final in nature, and miners would only hand their earnings back if they want to do so.

Despite that, ProudBitcoiner is still not losing hope. “Ethermine, because they mined the block my transaction was part of and it’s their goodwill if they want to return this or not,” they added.

The firm’s parent company, BitFly, faced a similar conundrum earlier this year when someone paid over $2.6 million in ETH as part of transaction fees in a block mined by Ethermine. However, BitFly pocketed the money after holding the funds for four days and stated any similar issues in the future will not be subject to any investigation or refund.

Looks like being one’s own bank does come with much greater responsibility.

70% of Ethereum Nodes Are Hosted on Centralized Services

https://decrypt.co/44321/70-of-ethereum-nodes-are-hosted-on-centralized-services

Podcast host and crypto investor Anthony Pompliano debated today that much of the Ethereum network is hosted on third-party cloud services like Amazon Web Services (AWS), a cloud service operated by web giant Amazon. He argued that this means popular decentralized applications (dapps) on the network could theoretically be shut down if AWS were to be shut off.

Cryptocurrencies like Bitcoin and Ethereum are—in their most basic form—mere pieces of software. They, like any website or web app, need to be hosted somewhere to operate properly. And while the Bitcoin network is relatively small—now 300 gigabytes—the Ethereum network is much larger and it’s harder to host on equipment at home.

The debate began when Pompliano tweeted a reference to Amazon founder Jeff Bezos, “[He] could shut down most of these Ethereum-based “DeFi” apps by simply shutting off AWS. You’re not decentralized if you just spin up servers with Uncle Jeff!.”

But “Pomp”—as Pompliano is called—didn’t see his dig last long. Journalist Camilla Russo, founder of The Defiant, responded to Pomp’s tweet shortly after, “Ethereum nodes could definitely be more decentralized. Still, facts don’t support this argument.”

Vitalik Buterin: Ethereum’s ‘Nearly Unusable’ for Many App Types

As Russo pointed out, data from Ethernodes shows that 70.5% of Ethereum nodes are running on hosted services, referring to cloud providers. This means that only 33% of these nodes are running on AWS. That means that 23% of the Ethereum network is on AWS—less than a quarter.

That’s why Bezos could, for one, not pull a plug on the Ethereum network if he wanted to, suggested Russo.

But an unimpressed Pomp continued to traverse the tweet thread asking commenters (no less than three times) if they considered DeFi applications to be indeed decentralized.

Bitcoin nodes use AWS too

Eric Vorhees, founder of crypto trading app ShapeShift, raised a similar argument for Bitcoin, “Most Bitcoin nodes also run on AWS. Because most servers of all kinds run on AWS.”

Vorhees’ argument, however, was shot down. Alex Thorn, an investor at blockchain venture firm Avon Ventures, noted that Bitcoin nodes were “much more distributed” on the network and seemingly run by home users, citing data from Bitnodes.

Whether Ethereum is truly decentralized, it’s clear that the tribalism between it and the Bitcoin community is ever present.

Ethereum Miners Bank Record $166 Million in September Fees

https://decrypt.co/43494/ethereum-miners-bank-record-166-million-in-september-fees

Miners on the Ethereum network recorded their highest-ever earnings in September 2020, according to data from on-chain analytics service Glassnode. The growth of the decentralized finance (DeFi) market in the crypto space was a major factor behind this rise.

Miners are entities or individuals who utilize computing rigs to maintain and mine blocks on proof-of-work cryptocurrencies like Bitcoin and Ethereum for “rewards” in the form of the tokens they are mining.

Increased network and individual smart contract activity lead to higher rewards for miners, as participants bid higher to get their transactions executed sooner.

“Ethereum miners made a total of $166 million from transaction fees in September – a new [all-time high],” said Glassnode in a tweet. The metric represented an increase of 47% compared to the previous high set in August.

In contrast, Bitcoin miners made only $26 million from fees during the last month.

Some miners said much of the growth came as increased trading activity in low-cap DeFi projects and non-fungible tokens—often having funny-sounding names like “Meme” and “Shroom”—ended up attracting huge retail capital.

Ethereum fees briefly equal a US stimulus check

“Because of the DeFi boom, transaction fees and miner earnings were really high,” Thomas Heller, chief operating officer of mining firm Hashr8, told Decrypt.

Why the big earnings?

DeFi tokens are usually traded on decentralized exchanges (DEXs), such as Uniswap, which currently boasts over $2 billion in liquidity, according to tracking site DeFi Pulse.

Compared to centralized exchanges (CEXs) like Binance, all DEX transactions are carried out on-chain on the Ethereum blockchain, as opposed to the in-house trade matching engines of CEXs. This means miners approve and conduct each DEX trade, and hence, gain money on each trade.

In March and April this year, Glassnode data shows Ethereum miners made an average of $4 million in fees. However, the earnings started picking up in June and July when the DeFi industry started to gain steam due to the launch of lending protocol Compound. Miners pocketed $22 million and $32 million in June and July respectively, data shows.

Ethereum fees have risen since June 2020. Image: Glassnode

The earnings are likely to go up as more trading, transactions, and smart contract interactions are made on the Ethereum network. And while some industry observers say DeFi could be a bubble, miners are likely hoping it doesn’t burst anytime soon.

Swiss Canton of Zug To Accept Taxes in Bitcoin, Ethereum

https://decrypt.co/40725/swiss-canton-of-zug-to-accept-taxes-in-bitcoin-ethereum

Citizens of the crypto-friendly region Canton of Zug in Switzerland can now pay their taxes using Bitcoin and Ethereum, according to a press release today.

The self-styled “crypto valley” is home to many crypto trading firms, exchanges, crypto banks, blockchain companies, and even the Ethereum Foundation, the non-profit entity that oversees the Ethereum network. And now, it’s taking its crypto aspirations a step ahead.

“Tax settlement by means of cryptocurrency will be available to both companies and private individuals up to an amount of 100,000 Swiss francs ($109,670),” the Zug canton said in a statement on Thursday.

To make this possible, the region has partnered with Zug-based crypto broker Bitcoin Suisse AG, which will convert the Bitcoin or Ethereum into Swiss francs and then transfer the amount to the state.

Bitcoin Suisse founder Niklas Nikolajsen said the crypto market has grown too big to ignore, and that he sees more crypto adoption in the traditional quarters. “Everybody cares about a $0.5 trillion market. There’s almost nothing controversial about trading Bitcoin anymore. It’s completely mainstream,” said Nikolajsen.

Largest Swiss online retailer now accepts Bitcoin, Ethereum and XRP

He added in a statement to news outlet Bloomberg, “With Bitcoin rallying during the pandemic and experts saying it could even act as an inflation hedge, the industry’s bellwethers might change their minds again.”

The Zug region offers low corporate taxes for all companies and has been accepting Bitcoin payments for certain government services since 2016, making it an attractive destination for crypto entrepreneurs. 

But crypto’s not all it’s doing. Zug even held Switzerland’s first blockchain-based municipal ballot in a test in 2018 and piloted a digital identity project using the technology in 2019. Clearly there’s more to come.

Ethereum Scammers Target Indian Prime Minister in Twitter Hack

https://decrypt.co/40698/ethereum-scammers-target-indian-prime-minister-in-twitter-hack

Hackers targeted a Twitter account belonging to Indian prime minister Narendra Modi and used it for a national relief fund early on Thursday morning, according to news outlet AFP.

The since-deleted tweet asked for charitable donations using a cryptocurrency, adding an Ethereum address in the comments.

While the targeted Twitter account is, in reality, used to promote legitimate relief contributions and donations, the social media site confirmed the account was targeted by hackers instead of the relief fund introducing crypto payments as a mode of donation.

“We’re aware of this activity and have taken steps to secure the compromised account. We are actively investigating the situation,” a Twitter spokesperson said in a statement.

The firm added it had no information on whether any other accounts were compromised. At press time, no similar reports exist either. Twitter also added it had not found any link between the Modi hack and the July breach, the report said.

The attack comes just months after a widespread attack took control of several high-profile Twitter accounts to promote cryptocurrency-related scams involving Bitcoin and Ethereum.

FBI, US Senate probe Jack Dorsey over Bitcoin scam Twitter hack

The Twitter accounts of a range of celebrities, such as social influencer Kim Kardashian, tech entrepreneur Elon Musk, and former US vice president Joe Biden, were hacked at the time.

The platform swiftly took down the affected accounts, but not before tweets were sent out by accounts totalling 346 million followers and over $120,000 in Bitcoin siphoned to the hacker’s address. US authorities allege that it was carried out by a 17-year-old teen in Florida, who purportedly gained access to the site’s admin keys.

Attackers used Slack to breach Twitter, according to report

Meanwhile, crypto scams remain a menace on social media. But while Twitter has stated it’s taking steps to prevent such instances, video-sharing giant Youtube continues to field such crypto ads. It has even been sued by Apple co-founder Steve Wozniak in August for failing to control such scams.

Ethereum fees briefly equal a US stimulus check

https://decrypt.co/38556/ethereum-fees-briefly-equal-a-us-stimulus-check

Forget rent, utility, food, and personal expenses; a US-supplied $1,200 stimulus check would have covered just one Ethereum transaction as of today, new data shows.

Transaction fees on Ethereum, the world’s second-largest cryptocurrency network by market cap, reached an unprecedented level for some traders earlier today, fuelled by the rise in DeFi projects and a new Initial Coin Offering, or ICO (remember those?).

Josh Rager, the founder of crypto trading platform Blockroots, pointed out on Twitter that fees reached the $1,200 level, while he attempted to purchase the tokens of MYX Network, a so-called “DeFi and deflationary” project:

As it turned out, the MYX token had specific smart contract issues causing it not to accept transactions below a certain GAS threshold. GAS works as “fuel” for the Ethereum network, and is a fee paid to miners to execute a trade.

Su Zhu, the founder of trading firm Three Arrows Capital, even joked about the high fees on Twitter, “spending more money on GAS for ethereum than pretty much anything else in real life now.”

While fees have since relatively dropped to sub-$200, they remain staggeringly high for a network that aims to become the world’s next monetary system. At press time, the average fee for an ETH transaction is $6 but can reach up to $200 based on the speed of transfer and liquidity.

Gas fees have hit a record high on Ethereum. Image: ETH Gas Station.

“Yield Farming” pushes Ethereum to its limits

The high fees are a direct result of a “yield farming” frenzy led by projects with funny-sounding tokens like Yam and YFI, which has seen “farmers” lock-up capital that can be borrowed by others for a significant interest rate, which is, in turn, paid back to the “farmers.” This creates potential returns of as high as 1,000% per year, at the cost of severe network congestion, potential scams, and a high dose of risk.

Unsurprisingly, Uniswap, the decentralized exchange on which such tokens can be purchased, has seen traders pay the highest GAS fees, over $3.1 million in the past month. It is followed by stablecoin Tether and Forsage, a crypto scam that originated in the Philippines.

The fees go to show the ongoing DeFi frenzy—a bubble that might burst—remains a game for the ETH wealthy, for now.

ConsenSys-backed Starkware is powering 9,000 transactions/second on this Ethereum-based DEX

https://cryptoslate.com/consensys-backed-starkware-is-powering-9000-transactions-second-on-this-ethereum-based-dex/

Decentralized trading applications are closing the gap on their centralized counterparts. The former were regarded as slow, clunky, and even “boring” in 2018, but have since seen extensive development and advancements in both technology and customer-facing UI.

On June 3, the DeversiFi 2.0 DEX said it has incorporated a layer-2 scaling technology on its trading protocol, pushing transactions counts to over 9,000 per second.

Can compete against fastest

As per a release, DeversiFi has teamed up with Starkware, a 2017-founded privacy and scalability protocol backed by the likes of  Pantera and ConsenSys Ventures, among others.

Starkware’s Layer-2 solution brings extensive scalability to non-custodial trading, such as that found on DEXs or related platforms. The firm utilizes Zero Knowledge Proof technology that allows processing trades in smaller batches and verifying proofs for each individual batch.

This allows transactions to be more secure and faster, as the use of Ethereum’s computing power is significantly reduced. Most on-chain exchanges or DEXs use a traditional method, leading to slower executions and transaction times for users.

The announcement noted:

“The DeversiFi platform brings instant settlement, privacy-by-default, withdrawal certainty, low fees, and deep aggregate liquidity — catering to serious traders seeking an edge in popular DeFi markets.”

DeversiFi touts its protocol can compete with the “fastest centralized exchange” while offering quick and reliable withdrawals, the latter of which benefits powers arbitrage and quantitative traders.

Starkware President Eli Ben-Sasson believes “commercial-grade” DeFi applications need robust cryptography and the use of zkSTARKS — the firm’s privacy solution — allow such protocols to scale to “tens of thousands of transactions per second” without a trusted setup.

Traders to be safeguarded

DeversiFi’s Will Harborne said integrating Starkware brings instant settlements and deep liquidity to the platform’s traders. He believes the “solutions born out” addresses the critical issue of scalability on other DEX platforms, but without compromising on feeds or transaction speeds.

A Data Availability Committee has been put together by DeversiFi as part of the 2.0 rollout, featuring industry-leading participants like Bitfinex and ConsenSys. This committee will ensure continual updates of account balances and keep an offline copy in case DeversiFi, or Starkware, face connectivity issues.

The above ensures customers are assured of withdrawals at all times, as funds are stored and accessible on DeversiFi’s Ethereum smart contracts at all times.

For traders protecting their holy grail-esque strategies, the protocol ensures unparalleled privacy. All transaction data is handled off-chain, with transactions updated only when executions are confirmed. This prevents others from analyzing trading patterns and, hypothetically, copying profitable strategies.

Meanwhile, ConsenSys’ Joseph Lubin congratulated the development:

The post ConsenSys-backed Starkware is powering 9,000 transactions/second on this Ethereum-based DEX appeared first on CryptoSlate.