Ropsten has successfully completed its merge
Ethereum’s Ropsten testnet has merged its proof-of-work blockchain with its proof-of-stake Beacon chain, which was the first test of its kind and a major milestone on a journey to Ethereum 2.0. More test merges are expected to happen on other testnets in the coming months.
Developers have not yet announced when the Merge will happen on the mainnet with Ethereum Foundation member Tim Beiko expecting it to happen between August and November, depending on how many bugs will be found and their severity. Currently, the proof-of-stake Beacon chain on Ethereum’s mainnet runs in parallel with the proof-of-work chain.
The Merge is a part of the highly-anticipated transition of the Ethereum blockchain from the energy-intensive proof-of-work consensus mechanism to the proof-of-stake.
It’s worth noting that the Merge won’t increase network’s transaction throughput, so the transaction fees are expected to stay high giving the same amount of network activity. The on-chain scaling solution known as “sharding” was pushed back to 2023 to make sure that developers have enough time to properly test the transition to PoS.
Ethereum developers have also decided to delay the so-called ‘difficulty bomb’ — an exponential increase of mining difficulty that is intended to incentivize the transition away from the proof-of-work consensus mechanism.
Ethereum co-founder and Cardano founder Charles Hoskinson has recently said that the earliest timeframe for the launch of Ethereum 2.0 is 2023, which may be delayed until 2024.
Terraform Labs is ordered to comply with the SEC investigation
The US Court of Appeals for the Second Circuit ruled that Terraform and its CEO Do Kwon have to comply with US SEC subpoenas related to the Mirror Protocol.
The South Korean entrepreneur has been served with a paper subpoena by the US financial watchdog when he attended Messari’s Mainnet conference in New York City in September last year. In response, Do Kwon appealed the motion in the New York District Court, arguing that the SEC broke its own rules when served him with the subpoena and that the agency lacked jurisdiction over Singapore-based Terraform Labs.
The court has overturned these arguments, pointing out that 15% of Mirror Protocol users are based in the US, Terraform Labs had US employees and the company made agreements with US-based entities, which granted the SEC sufficient jurisdiction.
The Mirror Protocol allows its users to buy synthetic assets that track the price of popular stocks like Tesla and Amazon.
The lawsuit is unrelated to the recent collapse of the TerraUSD (UST), in which the algorithmic stablecoin lost its peg and its corresponding token LUNA experienced a death spiral.
Following LUNA’s meltdown, Terra’s founder Do Kwon has been involved in numerous controversies with allegations ranging from cashing out billions from LUNA to swaying governance proposals in his favor with secret wallets. Kwon denied the allegations.
In other news
Centralized crypto lending platform Celsius with 1.7 million users has frozen withdrawals, swaps, and transfers between accounts amid the crypto market crash. Celsius promises its customers annual returns of up to 9.32% on fiat-backed centralized stablecoins. The company has placed customers’ funds into various DeFi protocols to earn yield. Rival lending platform Nexo has offered to buy qualifying assets of Celsius.
Following the activation of the long-awaited MimbleWimble Extension Block (MWEB) upgrade, South Korean exchanges Upbit and Bithumb announced delisting of Litecoin (LTC) due to its new privacy features conflicting with country’s anti-money laundering (AML) regulations. Binance didn’t delist LTC, but warned users that it won’t support Litecoin transactions with the MWEB function.
An attacker was able to steal 20 million of OP tokens - worth around $20 million dollars - due to a mistake made by trading firm Wintermute, which received a 20 million loan in OP from the Optimism Foundation. Wintermute admitted its fault and committed to buying back tokens that would be sold by the exploiter. A few days later, the hacker has returned 90% of stolen tokens, keeping 2 million OP as a bounty.
The Baltic nation of Lithuania is moving to ban all anonymous - also known as self-custodial or non-custodial - crypto wallets. The draft law has yet to be approved by the parliament.