Matrixport View_Technology #12

Matrixport Research

Summary

There will be two upcoming hard forks scheduled for the Ethereum blockchain. The first hard fork for the ETH 2.0 beacon chain has been discussed and will be targeted at increasing support for light clients on the network. The other hard fork is the awaited “Berlin” hard fork which will help to improve the gas efficiency and security of the Ethereum blockchain. After much delay, the “Berlin” hard fork is scheduled to go ahead in April.
As the Ethereum network remains congested, there have been new developments to help ease the problem. The Ethereum community has discussed a new EIP which will help to stabilize the price of gas fees with its new transaction pricing mechanism. In addition, the latest Ethereum L2 scaling solution, Optimism, is expected to launch its Layer 2 mainnet soon. Using optimistic roll-ups, it aims to help reduce congestion and gas fees for the network.
There have been on-going security breaches occurring across the entire ecosystem.

Public Blockchain: Mainstream Tokens

First Hard Fork of ETH 2.0 Beacon Chain is Set in Motion

Hard Fork Proposal ☆☆

A proposal published by Vitalik Buterin, Ethereum co-founder, noted that the Beacon Chain might be undergoing its first hard fork adjustment
The hard fork will allow developers to roll out critical upgrades to Beacon Chain, including (1) support for light clients by enabling them to connect to full nodes to interact with the blockchain; (2) enable light client support through special-purpose “sync committees” and (3) fix potential vulnerabilities in the Beacon Chain
The proposal is still in discussion and there has been no timeline set for the hard fork

Ethereum Core Developers Eye Mid-April for ‘Berlin’ Hard Fork

Hard Fork Update ☆☆☆

Ethereum developers have scheduled the Berlin hard fork for April 14 at block height 12,244,000, according to the update from the Ethereum All Core Developers meeting
The hard fork includes various optimizations for contracts including gas efficiencies, updates to how code is read by the Ethereum Virtual Machine (EVM) and other changes to protect against denial-of-service (DDOS) attacks
The Berlin hard fork was originally scheduled for June or July 2020, but was pushed back mainly due to centralization concerns around the Geth client on which most Ethereum nodes run
After smoothing out the worries, the hard fork is expected to go ahead on the rescheduled date

Ethereum Community Discuss Implementation of New Transaction Pricing Mechanism

Ethereum Improvement Proposal ☆☆

Ethereum community scheduled a call for a preliminary discussion on the implementation of Ethereum Improvement Proposal (EIP) 1559
EIP-1559 is a transaction pricing mechanism that includes “fixed-per-block network fees” on Ethereum, where the gas fee is split into two components: (1) A base fee that is fixed regardless of network traffic, and (2) an inclusion fee that fluctuates according to the network traffic
EIP-1559 proposes to burn the base fee and award the inclusion fees to miners to help deal with the fluctuating gas fees by reducing the incentive for miners to submit “fake” transactions with high gas fees in bid to pump up the transaction costs and extract more fees from normal network users
The proposal will help support the economic value of ETH tokens within the ecosystem and reduce the risks involved with miner extractable value (MEV)

dApp and Layer 2 Updates

Latest Ethereum Scaling Solution Announce Mainnet Launch

ETH Layer 2 Mainnet Launch ☆☆☆

The latest Ethereum scaling solution, Optimism, is set to be launched on the network’s mainnet in April
Optimism is an L2 scaling solution and uses optimistic rollups to achieve lower fees and latency, as well as greater throughput compared to Ethereum L1 alone
It is estimated that existing dApps on Ethereum can simply copy/paste their code to Optimism and migrate to it starting March, while Coinbase wallet already offered support for the solution

Security Incidents

DeFi

Based on the latest survey, the number of fictitious projects on blockchain has increased where founders disappear after raising money from the public. In the latest incident, Multi Financial, a DeFi on the BSC blockchain disappeared with 5,000 BNB in a day. There have been numerous cases of such incident occurring across the ecosystem. ☆☆
Yearn Finance suffered an exploit in one of its DAI lending pools with hacker making away with $2.8m. The attack caused the DAI vault to lose $11.1m in liquidity. ☆
Blockfolio, the digital currency portfolio management app, was the victim of a hack. Unlike other hacks, the hackers did not steal money from the company, instead the attacker accessed Blockfolio’s messaging system to send racist and offensive message via push notification. ☆
Both Alpha Finance Lab and Cream Finance were hacked over the same weekend through a flash loan attack with a total of $37.5m lost. ☆
Furucombo, a tool designed to help users “batch” transactions and interactions with multiple decentralized finance (DeFi) protocols at once, fell victim to an malicious attack from hackers. The attacker made use of a fake contract to fool Furucombo which netted the attacker over $14m in stolen funds. ☆

dApp

Keepchange, a Bitcoin marketplace platform, got hacked with the attacker getting away with customer data. The hacker managed to access customer’s data and submitted withdrawal request from the customer account to the hackers’ blockchain addresses. The company blocked the requests and no money was lost. ☆

Centralized Exchange

Since the first hack in Jan 2019 that lost NZ$24m, Cryptopia exchange has reportedly been hacked again even as it undergoes liquidation. Around NZ$62,000 worth of XSN cryptocurrency had been transferred out of its cold wallet in the latest hack. ☆

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

Sources: Bitcoin.com, BTCManager, Coindesk, Coingeek, Cryptonews, Ethereum.org, Hacked, Medium analyze by Matrixport

Disclaimer

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