Taproot is coming soon
Bitcoin miners are voting on the implementation of the long-awaited Taproot upgrade, which integrates Schnorr cryptographic signatures that can be used instead of the current elliptic curve digital signature algorithm (ECDSA).
Taproot will be the biggest upgrade since SegWit in 2017, and will make multi-signature, multi-input transactions more private, efficient, and lightweight in data by combining a set of signatures into a single one. Such design will allow several ways to hide the number of participants involved in a transaction.
Taproot will be activated in November through a soft fork if 90% of miners signal their support in any of the 2016-blocks periods between difficulty adjustments — that happen roughly every two weeks.
The first difficulty period didn’t achieve the 90% necessary threshold to lock Taproot for activation, but miners have three more months to reach consensus. Major mining pools that have already started including the Taproot “signal bit” in their blocks are AntPool, F2Pool, Foundry USA, 1THash, and SlushPool.
At the time of writing, Bitcoin miners didn’t voice any serious opposition to Taproot, unlike Ethereum miners to EIP-1559, so the upgrade is mostly likely to get approved. If it fails, though, the Bitcoin community will probably choose mandatory activation through a user-activated soft fork (UASF), similar to what happened during the SegWit2X scaling drama, which eventually led to a hard fork and the creation of Bitcoin Cash (BCH).
It’s important to understand that despite high anticipation, Taproot won’t significantly decrease transaction fees. Thus, due to network congestion many users will still have to adopt off-chain scaling solutions like the Lightning Network for small payments, as well as use wrapped/synthetic bitcoins on the Ethereum network, or even switch to other cryptos with low fees such as Litecoin, Bitcoin Cash, Monero, Dash or Nano.
Crypto community sends help to India
As India struggles with a massive second coronavirus wave, a crypto community raised over $3 million for the India Covid Crypto Relief Fund, which was started by the co-founder of Layer-2 scaling solution Polygon, Sandeep Nailwal. The fund attracted donations from major crypto influencers with Ethereum co-founder Vitalik Buterin contributing over $600,000.
The latest spike of positive cases in India has been associated with a new COVID variant, huge political rallies, religious events, and ongoing protests. As the country is facing a shortage of medical-grade liquid oxygen, crypto exchange Binance announced a donation of over 1,000 oxygen connectors to India’s hospitals.
Unlike many other countries, India saw a steady decline in coronavirus cases till March, which allowed its government to both donate and export homegrown vaccines to allies across the world. In a 180 degree turn after the recent COVID wave, India began importing vaccines and receiving help from other countries, refusing only one from its major geopolitical rival China.
The Indian government has been reportedly planning to ban cryptocurrency trading in the country this year, but later retracted from that decision as cryptos got more institutional adoption across the world, including major American companies like Tesla and PayPal.
In other news
BSC-based automated market maker Uranium Finance has been exploited for $50 million. An attacker took advantage of a small yet crucial error in protocol’s code that was introduced during migration to project’s V2. Uranium Finance is a fork of SushiSwap led by an anonymous team, which sparked speculations about an inside job.
Another project on the Binance Smart Chain, called Spartan Protocol, has been exploited to the tune of $30 million. An adversary was able to use flash loans to drain the funds from the SPARTA/WBNB liquidity pool due to a inaccurate liquidity share calculation. Spartan Protocol is a liquidity platform for synthetic assets.
After a successful community vote, DeFi lending protocol Aave launched its first liquidity mining program to incentivize users to switch to its V2 updated platform. For the next 3 months depositors and borrowers will be rewarded with stkAAVE tokens that can be used for governance or be sold on the open market.
The largest Ethereum-based automated market maker (AMM) by trading volume, Uniswap, released its version 3 that includes various innovative features to significantly increase capital efficiency of liquidity providers.