Welcome to The Protocol
Welcome to The Protocol, CoinDesk’s weekly roundup of the most significant developments in cryptocurrency technology. I’m Ben Schiller, the Opinion and Features Editor at CoinDesk. In this edition, we will cover:
- Movement Labs launches developer mainnet
- Cardano transitions to decentralized governance
- SSV DAO introduces SSC 2.0
- Elon Musk advocates for blockchain in government
Network News
MOVEMENT LABS LAUNCHES DEVNET:
Blockchain innovator Movement Labs has officially launched its developer mainnet, marking a significant step towards integrating Facebook (META)’s Move Virtual Machine (MoveVM) into the Ethereum ecosystem. According to a recent announcement, this deployment will initiate the establishment of Movement’s core infrastructure, enabling select partners to begin the implementation of decentralized finance (DeFi) protocols. This development comes after the initial mainnet launch in December and precedes the anticipated public mainnet beta release set for next month. The Move technology originated from Facebook’s now-defunct digital currency initiative, Diem, which was abandoned in early 2022. This technology has also played a pivotal role in the creation of the Sui and Aptos layer-1 networks. With the backing of a $38 million Series A funding round led by Polychain Capital, Movement Labs is pioneering the extension of the Move programming language to an Ethereum layer 2 for the very first time. Alongside the public mainnet launch, Movement is set to introduce a multi-asset liquidity program, laying the groundwork for robust DeFi applications. Read more.
CARDANO TRANSITIONS TO DECENTRALIZATION:
The proof-of-stake blockchain Cardano is poised to adopt decentralized governance on January 29, following the activation of the Plomin hard fork, as confirmed by the Cardano Foundation, a non-profit organization supporting the project. The foundation stated on social media platform X, “The Plomin hard fork takes effect, marking a crucial transition to full decentralized governance. ADA holders will now possess genuine voting power regarding parameter changes, treasury withdrawals, hard forks, and the future trajectory of the blockchain.” The ADA token was trading at 93 cents at the time of this announcement, reflecting a 1.4% increase for the day, according to CoinDesk and TradingView data. A hard fork represents a non-backward compatible alteration in the blockchain’s programming. The success of the Plomin hard fork relies on Stake Pool Operators upgrading their nodes and achieving a 51% approval vote. As of last week, nearly 80% of nodes had successfully transitioned to the new version. Read more.
SSV DAO INTRODUCES SSC 2.0:
The SSV DAO, the decentralized autonomous organization governing the decentralized staking protocol SSV Network, has unveiled an ambitious new framework called “SSV 2.0.” This initiative enables applications to leverage “based” technology through Ethereum validators. According to a press release shared with CoinDesk, SSV 2.0 represents the most significant endeavor for the SSV Network and aims to introduce based applications (bApps) to the Ethereum landscape. “Based” applications, particularly “based rollups,” are emerging as a compelling technology that has garnered interest from Ethereum developers due to their ability to enhance interoperability and bolster the security of networks built on top of Ethereum. Specifically, based rollups are seen as a potential solution to the fragmentation caused by numerous layer-2 networks currently operating on Ethereum. By utilizing “based” technology, these protocols can anchor their security and execution processes to Ethereum’s layer-1 validator set. Traditionally, layer-2 networks rely on “sequencers” to organize transactions and relay them back to Ethereum, but this approach has been criticized for creating single points of failure. Transitioning to layer-1 validators for execution and security can mitigate these issues, fostering a more resilient network. Ethereum developers recognize that based rollups offer improved interoperability and have recently convened to explore solutions to these challenges, with based rollups emerging as a significant breakthrough. The SSV Network is committed to addressing these complexities by introducing applications built with based technology into the Ethereum ecosystem. Read more.
ELON MUSK ADVOCATES FOR BLOCKCHAIN:
In his capacity as the head of the newly established Department for Government Efficiency (D.O.G.E.), Elon Musk has proposed that implementing a digital ledger system could provide a cost-effective method for tracking federal expenditures, securing data, processing payments, and managing government properties. Sources familiar with the discussions reveal that several representatives from public blockchain platforms have engaged with members of D.O.G.E. This department was formed in response to the federal government’s projected $6.7 trillion spending for the fiscal year 2024, which Musk criticized in October as “wasted” funds. He has pledged that D.O.G.E. would work to reduce this figure to no more than $2 trillion. Given the department’s name and Musk’s inclination towards cryptocurrency, particularly dogecoin (DOGE), his initiative to integrate blockchain technology aligns with current trends. Alongside the creation of D.O.G.E. on January 20, former President Trump issued an executive order to establish a working group on digital assets, led by venture capitalist David Sacks, tasked with identifying existing regulations related to cryptocurrency within a 30-day timeframe, among other goals. Read more.
Money Center
XRP STRATEGIC RESERVE:
- Ripple’s CEO, Brad Garlinghouse, has sparked a discussion about the concept of a national cryptocurrency reserve, asserting, “I believe it should represent the entire industry, not be limited to just one token, whether it’s BTC, XRP, or anything else.” Bitcoin proponents are hopeful for a bitcoin-exclusive reserve.
DEEPSEEK IMPACTS TOKEN PRICES:
- China’s response to ChatGPT has led to a significant decline in the prices of AI-related tokens.
REGULATORY AND POLICY:
- The Electronic Frontier Foundation is advocating for the dismissal of the long-standing Tornado Cash case, which involves the developers of the mixing software and the U.S. government.
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