Ethereum joins the team of proof-of-stake cryptocurrencies
After years of development, Ethereum (ETH) has finally shipped a highly anticipated upgrade known as “the Merge”, which transitioned the world’s second-biggest blockchain from the energy-intense proof-of-work (PoW) consensus algorithm to the environment-friendly proof-of-stake (PoS) mechanism.
The Ethereum blockchain now relies not on miners, but rather on validators to achieve consensus and add new blocks, cutting its energy consumption by 99.9%.
Major crypto exchanges including Binance, Coinbase, FTX, and Kraken had temporary paused trading for ETH and Ethereum-based tokens during the transition period. More than 40,000 live viewers joined the Ethereum Foundation’s livestream of the transition that took over 12 minutes.
The inflow of ether to exchanges have significantly increased prior to the upgrade, leading to a temporary 5-10% price dump after the Merge. While some Ethereum investors have been disappointed that ETH trended down against BTC following the landmark upgrade, many crypto natives including BitMEX co-founder Arthur Hayes have seen the Merge as a “sell the news” event that would trigger a correction.
A report from blockchain analytics platform Nansen highlighted that 5 entities held 64% of all staked ether (ETH) prior to the transition. Decentralized staking protocol Lido Finance accounted for 31% of staked ETH, with Coinbase, Kraken, and Binance controlling the other 30%. The data analysis from the blockchain platform Santiment showed that after the Merge 46% of PoS nodes were controlled by two addresses.
Following the recent Tornado Cash crackdown, the Ethereum community has been highly concerned with potential post-Merge censorship since the largest validators like crypto exchanges have to comply with regulators. Additionally, users can’t unstake ether until the Shanghai upgrade, which is expected to go live in 6-12 months.
After Ethereum’s successful transition to PoS many miners switched to other PoW cryptocurrencies with Ethereum Classic (ETC) experiencing a 500% increase in a hash rate over the last month. Other significant gainers of miner’s migration are the Ergo and Ravencoin blockchains.
Interpol requests law enforcement worldwide to arrest Terra founder Do Kwon
Four months after the collapse of LUNA and UST, the Seoul court issued a warrant for South Korean founder of Terraform Labs Do Kwon and five additional persons on allegations of violations of the country’s capital markets law.
Singapore police issued a statement that the South Korean entrepreneur has already fled the country. Kwon stated on Twitter that he is not “on the run” and ready to cooperate with any government agency.
According to Bloomberg, Interpol has issued a “red notice” for Kwon on the request of Seoul prosecutors. South Korea’s Ministry of Foreign Affairs is also trying to revoke his passport.
Following the collapse of Terra’s native token LUNA and its algorithmic stablecoin UST earlier in May, the crypto market has experienced a significant price correction with many centralized lending and borrowing platforms facing bankruptcy.
Do Kwon has a very controversial reputation in the DeFi space. On one hand, the South Korean entrepreneur dared to challenge US regulators and sue the US SEC for serving him with a subpoena in inappropriate way. On the other hand, Kwon has continuously dismissed criticism of his algo-stablecoin prior to the collapse.
In other news
The U.S. Treasury clarified its stance on sanctioned privacy protocol Tornado Cash, providing US persons with a guidance on how to apply for a license to recover their funds from the protocol without breaking the law. While using the protocol is prohibited, copying and sharing its open source code won’t violate the sanctions.
Canadian Prime Minister Justin Trudeau has criticized his political opponent Pierre Poilievre for promoting “volatile” cryptocurrencies as a way to opt out from inflation. Poilievre is a Bitcoin enthusiast and a supporter of Canada’s “Freedom Convoy” protest, which raised nearly $1 million in Bitcoin earlier in February after Trudeau invoked the Emergency Act that gave authorities the power to freeze bank accounts without a court order.
Crypto market making firm Wintermute has been hacked to the tune of $160 million. Experts say that the exploit might have been possible due to a bug in the tools used to generate “vanity addresses”, which usually contain recognizable names and numbers.
Cardano’s long-awaited Vasil hard fork went live after months of development and testing. Some features of the new upgrade has taken effect on September 27.