Ethereum-Based Altcoin Quietly Rallies 122% in Five Days While Bitcoin and ETH Dip

One under-the-radar altcoin that’s designed to solve several of Ethereum’s biggest challenges is stacking up massive gains as ETH and Bitcoin (BTC) consolidate into the new year.

The layer-2 scaling solution Metis Token (METIS) offers lower fees and faster transaction times than Ethereum, while still retaining the security of the leading smart contract platform.

According to the project website,

“Offloading data and execution to a second layer allows Metis to provide a more scalable and cost-efficient environment for building and interacting with Web3 applications.”

The protocol employs optimistic rollup technology to achieve its functional goals on a layer above the layer-1 blockchain but relies on this underlying layer for both security and settlements.

METIS, its native token, can be used for staking and internal payments, but also serves an important function within the Metis Virtual Machine (MVM) during the creation of a decentralized autonomous company (DAC).

The project explains,

“METIS tokens also play a role in reducing spam and ensure trust between developers and users alike. Users must stake some amount of METIS to start a collaboration with others on the platform, such as the founding of a DAC.

These tokens will be returned to the initial users if the collaboration is successful. Unsuccessful collaborations can lead to users losing their stake (akin to slashing penalties). Collaborators will also be paid and rewarded in METIS for the contributions.”

The price of METIS surged 122% from December 22th to the 27th, working its way up from $73.68 to an all-time high (ATH) of $164.23.

After some choppy corrective action took the altcoin as low as $133.42 earlier this week, it’s back up another 18.3% today and touched a fresh ATH of $175.60. It is now up 134% in the last seven days.

By contrast, Ethereum has been trading flat all week and at $3,762 is down 18.8% from its monthly high of $4,631.

Bitcoin remains below $50,000 and is currently priced at $47,648.

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ZK-Rollups Will Take “Years of Refinement”: Vitalik Buterin

Key Takeaways

  • Vitalik Buterin has published a new piece discussing how block production across blockchains will likely remain centralized even as rollups see wider adoption.
  • Buterin says that Ethereum will be able to use bypass channels and other techniques to regulate the block production market.
  • He added that it could “take years of refinement and audits” until crypto users feel comfortable to store their assets on a Layer 2 rollup.

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The Ethereum co-founder has high hopes for using rollups to scale blockchains. 

Vitalik Buterin Discusses the Future of Rollups

Vitalik Buterin has published a new blog post discussing rollups and blockchain scalability. 

The 1,500-word piece, titled “Endgame,” focuses on how the technology can be used to make block production more decentralized. Buterin says that the average “big block chain” today tends to have high block frequency, block sizes, and transaction speeds, but also ends up becoming highly centralized due to the high node running costs associated with creating big blocks. Many Ethereum competitors such as Solana boast fast transaction times but require expensive hardware to run nodes, which has led to criticism from the Ethereum community. 

Buterin goes on to explain that rollups, while improving block validation, still lead to centralized block production, and that there are two likely outcomes from a rollup-centric world: one where “everyone migrates” to a single highly scalable rollup, or one where network activity is spread across multiple solutions. 

In both instances, Buterin says, block production will still be centralized because of “ the network effects within rollups or the network effects of cross-domain MEV.” However, he also notes that techniques like committee validation, data availability sampling, and bypass channels can be used to regulate the block production market. 

The post makes direct reference to Ethereum, noting that the network is “very well-positioned” to adapt to a rollup-centric environment because it is specifically planning to integrate rollups as part of its roadmap. “Ethereum is open to all of the futures, and does not have to commit to an opinion about which one will necessarily win,” an excerpt reads, referring to the two possible scenarios in which one or several rollups thrive.  

Other “big block chains,” Buterin writes, will have to make a choice about whether to work toward achieving decentralized block production and censorship resistance. 

Buterin has long discussed how Layer 2 rollup solutions are set to become a key part of Ethereum’s path to scalability. Rollups of today come in two flavors: Optimistic and Zero-Knowledge. Optimistic Rollups like Optimism and Arbitrum bundle transactions and carry data off-chain to improve transaction speeds and gas fees, though they are subject to a seven-day dispute period for withdrawals. ZK-Rollups such as Starkware’s StarkNet, meanwhile, generate cryptographic proofs to prove that transactions are legitimate when sent back to the base chain. 

Ethereum’s Layer 2 rollup solutions have gathered momentum in recent weeks as the network suffers from ongoing gas fee issues. Many Ethereum-native DeFi projects have begun launching on Optimistic Rollups, while StarkWare’s StarkNet went live on mainnet last week. Still, Buterin says it will take “years of refinement and audits” for people to feel comfortable about using EVM-compatible ZK-Rollups to store their crypto assets. 

Buterin’s post lands amid a period of intense volatility for Ethereum and other Layer 1 blockchains. ETH crashed 17% below $4,000 Friday during a market-wide selloff, while other lower cap coins suffered bigger losses. It’s since posted a recovery, trading at $4,207 at press time. It currently accounts for about 20.73% of the global cryptocurrency market. 

Disclosure: At the time of writing, the author of this feature owned ETH and several other cryptocurrencies. 

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Ethereum Layer 2 Project Boba Network Hits $1B Locked

Key Takeaways

  • Boba Network is a Layer 2 Optimistic Rollup solution aiming to scale Ethereum.
  • The project has crossed over $1 billion in total value locked, while its native token is up 540% since launching last week.
  • Alongside Optimistic Rollups, several promising ZK-Rollup solutions are working to reduce gas fees on Ethereum.

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The race to scale Ethereum on Layer 2 is heating up. 

Boba Network Gains Adoption

Ethereum’s Layer 2 is coming to life. 

The latest solution to gain significant traction is Boba Network, an Optimistic Rollup launched by the OMG Foundation and Enya. According to data from L2Beat, it currently holds $1.08 billion in total value locked after seeing increased adoption throughout November. The total value locked was roughly $87 million on Nov. 14 and has increased by over 1,200% since then.  

Boba Network is one of a growing number of projects using Optimistic Rollup technology to scale the Ethereum network. It works by executing transactions outside of Layer 1 and submitting data to the base chain to save on gas fees. It uses a bridge that lets users move funds from Ethereum mainnet to Layer 2. It’s one of a growing number of projects using rollup technology to scale the Ethereum network. As Boba leverages Optimistic Rollups, it has a challenge period for transactions, which means there’s a seven-day withdrawal period to Ethereum mainnet. However, it gets around this by offering users faster withdrawals at a higher cost via a swap-based bridge. 

Other than the high costs of using Ethereum mainnet, one likely factor behind the growing usage is Boba’s recent token launch. The project launched BOBA with an airdrop to OMG holders last Thursday and it’s since rallied 540%. It hit an all-time high of $7.16 earlier today. Boba Network is the only Optimistic Rollup solution to launch its own token so far; its two biggest competitors, Arbitrum and Optimism, are yet to confirm any plans for a token despite welcoming an increasing number of leading DeFi projects and users to their networks in recent months. Arbitrum currently leads the race, holding 41% of the Layer 2 market share. 

Optimistic Rollups are only one part of Ethereum’s Layer 2 scalability offerings. It’s hoped that using Ethereum will become more affordable with the help of ZK-Rollups, another type of scaling solution that uses zero-knowledge proofs to bundle transactions off-chain. The leading ZK-Rollup projects include StarkWare, zkSync, and Loopring. StarkWare powers the Layer 2 decentralized exchange dYdX and the popular NFT project Immutable X. It recently raised $50 million and is preparing to launch a new product called StarkNet on mainnet this month. The team says it will reduce Ethereum gas fees by a factor of 100. 

Disclosure: At the time of writing, the author of this feature owned ETH, DYDX, BOBA, OMG, LRC, and several other cryptocurrencies. 

This news was brought to you by ANKR, our preferred DeFi Partner.

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Ethereum is Getting a New Layer 2 Optimistic Rollup

Key Takeaways

  • A new Optimistic Rollup created by Enya and OMG Network has gone live on mainnet.
  • Boba Network will be competing with the likes of Optimism and Arbitrum.
  • Unlike other rollups, Boba Network offers fast transfers to Ethereum mainnet.

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Enya and OMG Network have released the mainnet beta of a new Layer 2 Optimistic Rollup called Boba Network. 

Boba Network Goes Live

A new Layer 2 solution created by Enya in collaboration with OMG Network has gone live on mainnet. 

Boba Network is an Optimistic Rollup solution for scaling Ethereum. Enya worked on the project in partnership with OMG Network; it was previously called OMGX. 

According to Enya, Boba Network can help make DeFi and NFTs cheaper. It combines Optimistic Rollups with OMG Network’s scaling capabilities for Ethereum dApps to reduce gas gees and enhance transaction throughput. Enya says that Boba is a web-scale infrastructure.

Discussing the mainnet launch, Enya founder and CEO Alan Chiu said:

“We welcome the entire DeFi and NFT developer community to build on Boba, so that together we deliver a faster, cheaper, and more delightful experience to the next billion users of Ethereum.” 

Since the so-called “DeFi Summer” of 2020, Ethereum has faced problems with high transaction fees and network congestion. 

While Ethereum is expected to achieve scalability through Ethereum 2.0, the popularity of the network means there is already a great need for scaling solutions. Layer 2 rollups such as Optimism and Arbitrum are also hoping to help the network achieve scalability. 

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By deploying smart contracts on Layer 2, applications based on the Ethereum Virtual Machine consume low gas fees and have much higher throughput. These solutions process transactions off-chain and publish transactional data on Ethereum. As a result, they can help developers create more scalable dApps for use cases like DeFi and NFTs.

The project will compete with Optimism, Arbitrum, and other Layer 2 solutions like StarkWare. The differentiating feature for Boba Network is fast transfers from Boba to Ethereum mainnet, which is not found in other rollups. The Enya team claims that the Boba Network will reduce withdrawal times from seven days to a few minutes. 

Liquidity providers on the Boba Network will also benefit from fast transfer times between Layer 1 and Layer 2. For security and decentralization, the team has confirmed that there will be no multi-sig wallet for bridge assets. The team is yet to share in-depth details on the technical architecture. The project’s governance will be overseen by a decentralized autonomous organization (DAO), which will suggest and vote on improvements to the network. 

Discussions surrounding Optimistic Rollup solutions like Boba Network have heated up recently as some of Ethereum’s leading DeFi applications prepare to launch on Layer 2. Arbitrum is currently preparing to launch, with Ethereum staples like Balancer, Aave, and Uniswap all set to go live on the network this month.

This news was brought to you by ANKR, our preferred DeFi Partner.

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EY publishes Ethereum scaling solution to the public domain

EY’s attempts to promote secure, private transactions over public blockchains at cheaper costs has culminated in the release of Nightfall 3.

The company announced the news via a release on July 1 stating that Nightfall 3 combined ZK proofs with optimistic rollup — ZK-Optimistic Rollup — to improve transaction efficiency on Ethereum.

Indeed, ZK-Rollups are one of the layer-two scaling solutions being developed to achieve scalability for networks like Ethereum via a process of batched transfers “rolled” into one transaction.

EY’s first contribution to ZK proofs was in April 2019 as previously reported by Cointelegraph at the time. In this new iteration, the EY team says Nightfall 3 is a collection of tools for privately managing Ethereum transactions.

Nightfall 3 reportedly ZK proofs transactions into optimistic rollups, removing the need for all authentication nodes to verify the validity of the transactions.

Nodes that challenge invalid blocks will receive rewards thus ensuring that only valid transactions are added to the blockchain. According to the EY team, Nightfall 3 constitutes a significant improvement in transaction efficiency and gas fee reduction.

Detailing the improvements in the ZK-Rollups solution, Paul Brody, global blockchain leader at EY, remarked that the protocol offered the best balance of mathematical efficiency and security for private transactions on the Ethereum network.

According to the announcement, Nightfall 3’s ZK-Optimistic Rollups solution can deliver almost 90% in gas fee reduction compared to public ERC20 token transfers.

By publishing Nightfall 3 to the public domain, Brody stated in the announcement that EY was doing its bit to hasten enterprise adoption of the technology.

Related: Major Auditing Firm Ernst & Young Releases Updates to Two Blockchain-Related Products

With Ethereum 2.0 is still in the works, layer-two solutions like ZK proofs and Optimistic Rollups continue to be touted as short-term solutions to increase Ethereum’s network throughput.

ZK proofs are not EY’s only exploratory work on blockchain technology. Indeed, the firm has previously published a blockchain analyzer tool. The auditing giant released a beta version of the smart contract analyzer back in April 2019.