Matrixport View_Technology #7

Matrixport Research

Summary

ETH continues its march towards ETH 2.0, with the key Medalla testnet progressing well. As part of the transition, Spadina, a separate testnet focusing on genesis and deposit was launched to run parallel with Medalla. ETH 2.0 is expected to launch in late 2020 or early 2021.
In other ETH news, developers have been actively discussing proposals on gas optimization on the network. Numerous proposals were floated, and the community will continue to study the proposals before deciding on the measures to reduce gas prices on the Ethereum network.
Bitcoin introduced its latest BIP340 support where the new update will add schnorrsig module and merge the support with libsecp256k1 master.
Zcash has made its new Halo 2 source code public. Halo 2 is an updated, more efficient version of ECC’s recursive proof composition that eliminates the need for a trusted setup in Zcash.
In September, the crypto industry witnesses an increase number of hacks and scams. There has been a rise of phishing scams where scammers direct unwitting users to deposit their funds into a fake address. In addition, there have been a few scam projects such as Bantiample and EMD where the team ran away with users’ fund.

Public Blockchain: Mainstream Tokens

“Medalla”, the ETH 2.0 Multiclient Testnet, Continues to Progress Well

Testnet Update ☆☆

Since the incident on 14th August, where a bug crashed the network, Medalla testnet has been going smoothly with 39,000 active validators and another 12,000 in the activation queue
To reduce reliance on Prysm (the main ETH client), the community continues to push for client diversity, with other clients upgrading to become more robust, well documented, and improve their client support services
In addition to the community efforts to try new ETH clients, the client teams are working on ensuring that switching clients will be both easy and safe with its new cross-client standards, where users can hop from one client to another with minimal downtime and no risk of accidental slashing of funds
One of the primary goals of ETH 2.0 is to reach Phase 1.5 (The Merge) where existing ETH chain’s consensus will be integrated into ETH 2.0, and ensuring the transition is as seamless as possible to existing users and application

Developers Discuss Gas Optimizations on Ethereum

Proposal ☆☆

An Ethereum All Core Devs call was held on Friday to discuss a series of Ethereum Improvement Proposals (EIP) as gas fees on the network remain historically high
The agenda included several discussion points on high gas prices and ways to mitigate issues such as the existence of “gas tokens” and their tendency to push gas prices higher than normal
The mempool is often filled with transactions bidding a certain gas price to mint these tokens, resulting in artificial high gas prices, in order to counter it, a proposal to eliminate the refund mechanism was floated although more data is required before formally discussing options to eliminate the mechanism
EIP-2929 and EIP-2711 were also discussed as part of the discussion to reduce gas prices; however, these proposals are still in preliminary discussions and no decisions have yet to been made
All the changes are being discussed primarily for inclusion in the Berlin hard fork, however, many of these EIPs are yet to be tested and approved, suggesting that the hard fork is some time away

Bitcoin’s BIP340 Support Merged in lubsecp256k1 Master

Code Support ☆☆

Pieter Wille, one of the core developers of Bitcoin, announced BIP340 support has been successfully merged with libsecp256k1 master
The new update adds schnorrsig module which implements BIP-340 compliant signatures, allowing for signing, verifications and batch verification tools
This updates Bitcoin’s src/secp256k1 subtree to the latest libsecp256k1 upstream version with BIP-340 support

ETH 2.0 Devs Deploy “Spadina” Testnet

Testnet Launch ☆☆☆

ETH 2.0 developer Danny Ryan announced the deployment of Spadina, a mainnet-configuration test network with a three day-lifespan in 29th September (12pm UTC)
Spadina will run parallel with Medalla, focusing on genesis and deposits ahead of the mainnet launch
The announcement also included the completion of CLI (eth2.0-deposit-cli) audit by Trail of Bits (the audit company) along with the release of EIP-2982: Serenity Phase 0 with Vitalik
As one of the more difficult and risky part of the transition process, a successful deployment of Spadina will give developers and users more faith before Ethereum transit to ETH 2.0 mainnet in late 2020/early 2021.

Public Blockchain: Others

Zcash Made its New Source Code Public

Code Release ☆☆

The Electric Coin Co., the company behind Zcash, unveiled its new code for the blockchain and crypto community
The company opened its Halo 2 source code — an updated, more efficient version of ECC’s recursive proof composition that eliminates the need for a trusted setup in Zcash
The Ethereum Foundation helped in the development of Halo 2, with the new code setting the stage for future support of recursive proofs in support of layer 1 scalability

Blockchain Adoption in Traditional Industries

**Financial Industry **

A joint venture between the British multinational investment bank HSBC, Singapore Exchange (SGX), and state-owned investment company Temasek has completed its first digital bond issuance of $300 million worth of corporate bonds on SGX’s digital asset platform by employing blockchain technology. (Blockchain; Digital bond issuance ☆)
Mastercard announced a proprietary virtual testing environment for central banks to evaluate Central Bank Digital Currencies (CBDC) use cases. The platform enables the simulation of issuance, distribution and exchange of CBDCs between banks, financial service providers and consumers. (CBDC; Partnership achieved ☆☆)

Security Incidents

Public Blockchain

An Ethereum account suffered a gas price attack and lost 115 ETH. This was the result of the account being manipulated by hackers, causing the gas price setting to be abnormal ☆
A phishing and fraud website based on YFII scammed users of 105 ETH. ☆
Slovak cryptocurrency exchange ETERBASE discloses $5.4 million hack where cryptocurrencies were stolen from the company’s hot wallets. ☆
Bantiample, a project on the Binance Smart Chain, reportedly cashed out 3,000 BNB and disappeared. ☆
Over $150m was drained from KuCoin exchange where hackers obtained the private keys to the exchange’s hot wallets and withdraw large amount of BTC and ETH into an unknown wallet. KuCoin assured the customers that stolen funds will be covered completely by its insurance fund. ☆☆

DeFi

As DeFi mining becomes more popular, there are a sharp rise in phishing attacks targeting Ethereum DeFi mining users through DeFi mining phishing authorization. An estimated 200,000 USDC and 52 YAMV2 have been lost to such scams. ☆☆
EOS DeFi mining project, EMD, is suspected of running away with users’ fund. The project contract emeraldmine1 has transferred 780,000 USDT, 490,000 EOS and 56,000 DFS to the account sji111111111. ☆
EOS DeFi liquidity mining project Coral’s wRAM was hacked and lost more than 120,000 EOS. ☆
bZx protocol was attacked by a duplication attack where several iTokens were duplicated by hackers. The bZx pools were frozen for 3 days before being restored. A total of 4,700 ETH was stolen from the wallet. ☆☆
An Uniswap phishing website has appeared where the website claims that 1 ETH can be exchanged for 1,200 UNI. Over hundreds of ETH were scammed from users. ☆

Importance level：low-☆; medium-☆☆; high-☆☆☆

Sources: Blockchain News, Coinmarketcap, Coinness, Cointelegraph, Coindesk, HSBC, Medium, Mastercard, Twitter, Theblockcrypto analyzed by Matrixport

Disclaimer

Matrixport provides this analysis as general information only. Matrixport accepts no responsibility for the accuracy or completeness of any information herein contained and Matrixport shall not be responsible for any loss arising from any investment based on any forecast or other information herein contained. The contents of this materials should not be construed as an express or implied promise, guarantee or implication by Matrixport that the forecast information will eventuate. The cryptocurrency market is highly volatile. Buying, selling, holding, or investing in cryptocurrencies or related product carries various risks and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before participating in the cryptocurrency market. Matrixport is not acting as a financial adviser, consultant or fiduciary to you with respect to any information provided. Any information available here is “general” in nature and for informational purposes only.