Tag: POS

Polygon Labs Unveils New PoS Testing Toolkit to Enhance Devnet Operations

by Blockchain News

On November 7, 2023, Polygon Labs introduced a groundbreaking Polygon PoS v1 Testing Toolkit, designed to revolutionize devnet management on the Polygon network. The toolkit, which serves to ease the development process, makes the deployment, monitoring, and testing of Polygon Point-of-Service (PoS) devnets simpler. It also contributes to the simplification of the process. It is based on Express-CLI, which is an improved version of Matic-CLI, which it was developed on top of. It intends to do this by hastening the testing and deployment processes for crucial components such as “bor,” “erigon,” and “heimdall.”

The deployment of the toolkit may be greatly customized, providing developers with a solution that can be deployed with a single click and that can be adapted to meet certain needs. Its effective monitoring and testing capabilities are going to make deployment automation and devnet assessment much easier, which will greatly cut down on the amount of time required for development and will encourage innovation.

Express-CLI, which combines infrastructure-as-code with test scripts, is the core component of the toolkit. Its name stands for Command Line Interface. Because of this, software developers are able to carry out a broad range of tasks in an uncomplicated method. It eliminates the need for human testing on Mumbai nodes, which leads in a decrease in both the amount of work that must be done and the number of errors that must be made while also maintaining the validity of the testnet design.

The regression tests provided by the toolkit make it possible to make changes to the versions of the components as well as to carry out complete testing in order to guarantee backward compatibility and stability. Express-CLI’s deployment of streamlined devnets is cloud-agnostic, fully automated, and supports both local and remote devnets, as well as testnet and mainnet nodes. Additionally, it supports testnet nodes.

Express-CLI enhances release processes by verifying all tests on a devnet before any testnet deployment, and it is poised to automate further by testing every commit/PR on a permanent devnet.

Polygon Labs invites developers to explore the toolkit on their Github page and stay updated via their blog and social channels, advocating for a joint effort to foster Web3‘s mass adoption.

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U.S. IRS Clarifies Taxation on Crypto Staking Rewards

by Blockchain News

The United States Internal Revenue Service (IRS) has issued a ruling that clarifies the taxation of cryptocurrency staking rewards. According to Revenue Ruling 2023-14, released on July 31, 2023, crypto staking rewards must be reported as gross income in the year they are received.

Details of the Ruling

The ruling specifically applies to cash-method taxpayers who receive cryptocurrency as rewards for validating transactions on proof-of-stake (PoS) blockchains. This includes both direct staking of cryptocurrency and staking through centralized crypto exchanges.

The IRS defines dominion as the time when the investor controls and has the ability to sell, exchange, or otherwise dispose of the cryptocurrency rewards. The fair market value of the crypto rewards should be included in annual income and determined at the time the assets are received.

Background and Implications

Cryptocurrency staking is a process where individuals participate in the validation of transactions on a blockchain by holding and “staking” their cryptocurrency. In return, they receive additional units of cryptocurrency as rewards.

Previously, the IRS had subjected crypto-mining rewards to both income and capital gains tax but had no provisions for staking rewards. This new ruling treats crypto staking like stock dividends, according to Messari founder Ryan Selkis.

The ruling states: “If a cash-method taxpayer stakes cryptocurrency native to a proof-of-stake blockchain and receives additional units of cryptocurrency as rewards when validation occurs, the fair market value of the validation rewards received is included in the taxpayer’s gross income in the taxable year in which the taxpayer gains dominion and control over the validation rewards.”

Price Influence on PoS-Based Cryptocurrencies

The IRS’s ruling on crypto staking rewards is a major step towards delineating the tax obligations of crypto investors in the United States. It provides specific guidelines for those involved in PoS blockchains, and it may have implications for the prices of PoS-based cryptos, like Ethereum, depending on market reactions and investor sentiment.

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Understanding ETH/BTC Rate – Key Factors and Price Predictions

by Blockchain News

According to CME Group report, the two dominant cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), make up over 61% of the total market capitalization of all cryptocurrencies. The connection between these two cryptoassets has been especially strong since the introduction of BTC futures in December 2017, circling around +0.85 during the last year. 

When compared to the USD, these cryptocurrencies exhibit high volatility. BTC’s daily price volatility during the last year was 42% annualized, compared to ETH’s daily volatility of around 59%. This shows that ETH tends to climb more when BTC rises, and vice versa. 

It’s noteworthy to note that the volatility of the ETH/BTC (ETH-BTC) exchange rate is lower than that of either BTC or ETH alone. This has been the situation ever since BTC futures were introduced in late 2017. The volatility of ETH-BTC has decreased to 30% during the last year, which is around one-fourth less than that of BTC-USD and nearly half that of ETH-USD.

The ETH-BTC exchange rate has very little sway on changes in interest rates, gold prices, or crude oil futures. However, it has shown a greater interest in the future of the USD and technology stocks. Since May 2022, the one-year rolling correlation of ETH-BTC with the tech-heavy Nasdaq 100 has been consistently around +0.2, suggesting a modest but persistent positive correlation. 

The distinct sentiments of ETH and BTC can be attributed to their distinct applications and market supply methodologies. ETH’s market capitalization stood at $224 billion on July 11, 2023, while BTC’s was substantially higher at $550 billion.

ETH switched to a less energy-intensive proof of stake (PoS) paradigm in 2022, whereas BTC uses an energy-intensive proof of work (PoW) system. The maximum supply of Bitcoin is 21 million coins, with 19,4 million currently in circulation. In contrast, the total supply of ETH is theoretically unlimited, with the potential to mint up to 18 million new coins per year.

The mining of new ETH coins has begun to decrease since the implementation of the PoS system. The creation of new BTC coins has continued at an annual rate of 335,000. At the next halving event, which is anticipated to occur in April 2024, the BTC supply is expected to be halved.

BTC’s quadrennial halvings in 2010, 2014, and 2018 coincided with huge runups in price prior to the reduction in BTC supply growth, followed by enormous bear markets. Going into the three previous halvings, the amount of revenue that miners demand for validating transactions on the bitcoin blockchain has tended to spike, followed by tremendous declines in bitcoin prices of between 70% and 93%.

Looking ahead, if BTC rallies ahead of its upcoming April 2024 halving as it did ahead of previous halvings, that might also help ETH prices to rise even further on a relative basis. However, these possibilities are far from certain. 

In conclusion, the Ether-Bitcoin price nexus is influenced by a variety of factors, including the supply mechanisms of both cryptocurrencies, their correlation with technology stocks and the USD, and macroeconomic factors such as interest rates and monetary policy. As the crypto landscape continues to evolve, these dynamics will be crucial to watch.

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CoinFund Secures $158M for Seed IV Fund, Surpassing Initial Goal

by Blockchain News

According to Blockchain.News, CoinFund has successfully raised $158 million for its Seed IV Fund, exceeding its initial target of $125 million. This achievement underscores the firm’s commitment to fostering innovation in the web3 ecosystem.

CoinFund, a leading cryptonative investment firm, has been making waves in the industry since its inception in 2015. The firm was founded by Jake Brukhman, a former Highbridge Capital Management and Amazon employee, and later joined by Alex Felix, an American Capital alum. Today, CoinFund boasts a global team of nearly 30 individuals and has made over 100 investments across six investment vehicles.

The Seed IV fund is designed to support early-stage investments in innovative teams developing web3 technologies. CoinFund’s CEO, Jake Brukhman, expressed his optimism about the firm’s future, stating, “Over the last two years, we’ve built a truly institutional-grade firm, the model of a large professional manager in web3.”

CoinFund’s recent investments include Cloudburst Technologies, a company specializing in cyberthreat intelligence for digital currency fraud, Gensyn, an ML compute protocol, Giza, an AI platform for smart contracts and web3 protocols, and Robert Leshner’s Superstate, which is developing blockchain-based financial products.

The firm also recently announced the composite ether staking rate (CESR) in collaboration with CoinDesk Indices. CESR is a global floating rate benchmark derived from the daily transaction fees and staking rewards from the Ethereum Proof of Stake (PoS) blockchain. This initiative showcases CoinFund’s continued support for the growth and maturity of web3 and its mainstream convergence.

As CoinFund continues to grow, it remains committed to its mission: “CoinFund champions the leaders of the new internet – powered by foresight as active investors to achieve extraordinary results.” This mission statement reflects the firm’s dedication to supporting the leaders of the new internet and achieving extraordinary results through active investment.

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Ethereum to Undergo 4 Phases to Tackle the Scalability Issue after Merge

by Blockchain News

The much-anticipated Merge saw the light of day yesterday, September 15, setting the ball rolling for a proof-of-stake (PoS) consensus mechanism in the Ethereum (ETH) network.

Since the Merge is the first step towards solving the scalability trilemma, the second-largest cryptocurrency will have to undergo four more steps to solve this issue, as reported by Bloomberg. 

The four phases include the surge, the verge, the purge, and the splurge. Per the announcement:

“The Surge: Implementation of sharding, a scaling solution which will lower the cost of bundled transactions on Ethereum.”

The report added:

“The Purge: Elimination of historical data and technical debt. The Splurge: Miscellaneous updates after the first four stages to ensure smooth functioning of the network.”

The time frame for these stages is not well defined, but Sameep Singhania believes it might take two to three years. The co-founder of QuickSwap pointed out:

“It’s hard to talk about the timelines of the following four stages because all of them are still under active research and development. But, in my opinion, it will easily take 2-3 years before all phases are complete.” 

Aditya Khanduri, the head of marketing at Biconomy, also opined that the purpose of the four upgrades was to make Ethereum cheaper, faster, and more scalable.

Upon the completion of the remaining four phases, Ethereum co-founder Vitalik Buterin pointed out that the network would be in a position to process 100,000 transactions per second.

Therefore, the merge is seen as a stepping stone toward future improvements. Developers involved in the Merge noted that switching from a proof-of-work (PoW) to PoS would make ETH easier and friendlier to design future updates that lower gas fees.

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Crypto Venture Capitalist Breaks Down Potential Winners and Losers from Ethereum Merge

by Blockchain News

Paul Veradittakit, a Partner at Pantera Capital which is a crypto investment firm based in California, talked about on Sunday what he thinks about winners and losers from the Ethereum “Merge.”

In an interview published by Forbes on Sunday, the media inquired whether the Ethereum merge would happen in September as planned earlier and requested which tokens would rise or fall as a result of the upgrade.

Veradittakit assured the public that the merger will happen – the transition from proof of work to proof of stake through a merging of two blockchains.  

The executive said the merge will bring a lot of visibility and growth to Ethereum.

“The Ethereum ecosystem is about to flourish, and people are going to see Ethereum, layer 2s. I also think it could be helpful for DeFi and potentially lead to some other use cases like NFTs on Ethereum as well. Therefore, it will probably focus a bit more on Ethereum. The other layer 1s have to evaluate how it goes and figure out what their differentiators are going to be after the merger,” Veradittakit explained.

Optimistic Remains About the Merge

Next month, the launch of Ethereum’s crucial update, the Merge, will signify the transition from the Proof-of-Work-based consensus mechanism to the more sustainable and less wasteful Proof-of-Stake system.

There has been a growing buzz within the crypto community about what the consequences that the Merge may bring for the blockchain network founded by Vitalik Buterin.

Some crypto experts have, however, urged that Proof of Work will live on after the merge.

The update, which is scheduled to be launched on 15th September next month, is expected to revolutionize the blockchain network, making it more scalable, cheap, and accessible.

The upgrade is expected to bring significant changes with the likes of mining, which could disappear. Miners, who have invested in infrastructure to mine on proof-of-stake networks, are most likely to become redundant after the merge.

Some believe that even after 15th September, the Proof of Stake consensus will continue to exist alongside the Proof of Work consensus, mainly to allow for a less traumatic transition and to take care of things in case the merge fails to complete its upgrade.

Some argue that miners could try using their pricy rigs on other networks. In recent weeks, Ethereum Classic (ETC) has witnessed a veritable price explosion. ETC, the hard fork of Ethereum created in 2017, will still maintain the Proof of Work system.

Ethereum’s proof-of-stake is considered more environmentally friendly, as it can validate transactions without consuming so much energy. The proof-of-stake mechanism is estimated to use 99.95% less energy than its proof-of-work chain.

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Ethereum Hits a Monthly High above $1,500, Merging Events Continues Engulfing the Market

by Blockchain News

Ethereum (ETH) returned to levels last seen in June based on renewed momentum following those upcoming potential merging events. 

Market insight provider Santiment explained:

“Ethereum’s return above $1,500 for the first time since June 12th appears to be happening as the crowd has little belief in this rebound. Despite this, the average ETH return of 30-day traders has ballooned to +28%, the highest since August 2021.”

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Source: Santiment

The 30-day return for Ethereum traders also hit an 11-month high, suggesting that the renewed momentum has driven their profits to levels last seen in August 2021.

Furthermore, ETH supply in profit also soared by 56%. On-chain insight provider Glassnode stated:

“Over the last month, almost 7.8% of circulating supply of ETH has transacted on-chain and changed hands. The total ETH supply in profit has now increased to 56%, after hitting lows of 41% prior to the current price rally.”

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Source: Glassnode

The second-largest cryptocurrency was up by 3.8% to hit $1,511 during intraday trading, according to CoinMarketCap. 

During a recent developers’ call, September 19 emerged as the most probable date for the merge.

Therefore, these upcoming events have been making airwaves, triggering a bullish momentum in the Ethereum market because the merge is anticipated to be the biggest software upgrade in the ecosystem.

The merge is expected to transform the Ethereum network to a proof-of-stake (PoS) consensus mechanism from the current proof-of-work (PoS) framework, which has been elusive for a few years.

The PoS algorithm will enable the confirmation of blocks in a more cost-efficient and environmentally friendly way because validators will stake Ether instead of solving a cryptographic puzzle. 

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Ethereum Hits a Monthly High above $1,500 as Merge News Continues Engulfing the Market

by Blockchain News

Ethereum (ETH) returned to levels last seen in June based on renewed momentum following those upcoming potential merging events. 

Market insight provider Santiment explained:

“Ethereum’s return above $1,500 for the first time since June 12th appears to be happening as the crowd has little belief in this rebound. Despite this, the average ETH return of 30-day traders has ballooned to +28%, the highest since August 2021.”

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Source: Santiment

The 30-day return for Ethereum traders also hit an 11-month high, suggesting that the renewed momentum has driven their profits to levels last seen in August 2021.

Furthermore, ETH supply in profit also soared by 56%. On-chain insight provider Glassnode stated:

“Over the last month, almost 7.8% of circulating supply of ETH has transacted on-chain and changed hands. The total ETH supply in profit has now increased to 56%, after hitting lows of 41% prior to the current price rally.”

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Source: Glassnode

The second-largest cryptocurrency was up by 3.8% to hit $1,511 during intraday trading, according to CoinMarketCap. 

During a recent developers’ call, September 19 emerged as the most probable date for the merge.

Therefore, these upcoming events have been making airwaves, triggering a bullish momentum in the Ethereum market because the merge is anticipated to be the biggest software upgrade in the ecosystem.

The merge is expected to transform the Ethereum network to a proof-of-stake (PoS) consensus mechanism from the current proof-of-work (PoS) framework, which has been elusive for a few years.

The PoS algorithm will enable the confirmation of blocks in a more cost-efficient and environmentally friendly way because validators will stake Ether instead of solving a cryptographic puzzle. 

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Cardano Elbows Ripple to Take 6th Position, Thanks to Heightened Development Activity

by Blockchain News

Cardano (ADA) has been scaling the heights because it is now the sixth-largest cryptocurrency after dethroning Ripple (XRP) with a market capitalization of $20.71 billion, according to CoinMarketCap. 

Cardano is going through the roof based on factors like increased development activity. Market insight provider Santiment explained:

“Cardano is one of many altcoins that have enjoyed a great start to the week. Development activity has hit AllTimeHigh levels, as ADA’s team worked on innovating while prices were suppressed.”

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Source: Santiment

Cardano is a proof-of-stake (PoS) blockchain, which is designed to be a scalable, sustainable, and flexible network for running smart contracts needed when developing decentralized finance (DeFi) applications and new crypto tokens.

Therefore, Cardano is one of the sought-after networks in the development arena based on the latest trend of flipping Ripple’s market capitalization of $20.14 billion.

Market analyst under the pseudonym Tajo Crypto pointed out:

“Cardano pumped more than 25%, so it flipped XRP to become the 6th largest crypto by market cap. Cardano is doing well with over 5 million assets minted from its network recently. Cardano is also getting ready for the Vasil upgrade in June. ADA is doing well.”

ADA was up by 18.66% in the last seven days to hit $0.6124 during intraday trading, according to CoinMarketCap. 

Therefore, Cardano seems not to be relenting in its quest to flip other cryptocurrencies. For instance, it elbowed Polkadot (DOT) from the seventh position in January 2021. As a result, it became the biggest proof-of-stake network. 

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Ethereum Unlikely to Merge in June, Despite PoW Undergoing

by Blockchain News

The much-anticipated merge of Ethereum will not occur in June as planned, according to Ethereum lead developer Tim Beiko.

Beiko took to Twitter and tweeted:

“It won’t be June, but likely in the few months after. No firm date yet, but we’re definitely in the final chapter of PoW on Ethereum.”

This revelation comes days after the first shadow fork that served as the merge trial went live on the Ethereum mainnet.

The shadow fork was to stress test syncing and state growth on the ETH network, as revealed by Ethereum Foundation developer Parithosh Jayanthi. 

The merge will act as the biggest software upgrade in the Ethereum ecosystem by shifting the current proof of work (PoW) framework to a more cost-effective and environmentally friendly proof of stake (PoS) consensus mechanism.

Furthermore, validators will take up the role of miners when it comes to the confirmation of blocks based on the amount of ETH staked, acting as collateral against dishonest behaviour. 

Despite the PoW consensus mechanism on the Ethereum network is in the final stretch, Beiko did not give a precise date when the merge would happen, but he opined that it would happen a few months after June. 

A transition to the PoS will improve scalability by enabling upgrades like sharding on the ETH blockchain. 

The merge is being waited with bated breath because it will enhance Ethereum’s quest to be a deflationary asset. Its value is expected to continue increasing with time on the foundation of slashed supply. 

The second-largest cryptocurrency was up by 1.97% to hit $3,108 during intraday trading, according to CoinMarketCap. Ethereum reached an all-time high (ATH) price of $4,850 in November last year, but it has not yet reclaimed this level so far this year. 

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Bitcoin (BTC) $ 44,145.83 2.22%
Ethereum (ETH) $ 2,391.00 1.65%
Litecoin (LTC) $ 79.15 6.67%
Bitcoin Cash (BCH) $ 257.83 4.32%