The Protocol: Bitcoin Bridged Trustlessly to L2; Ethereum’s Blob Mob

Welcome
to
The
Protocol,
CoinDesk’s
weekly
wrap-up
of
the
most
important
stories
in
cryptocurrency
tech
development.
I’m

Marc
Hochstein,
CoinDesk’s
deputy
editor-in-chief
for
features,
opinion
and
standards.

IN
THIS
ISSUE:

• Ethereum’s
  blob
  mob
• Staking
  on
  Starknet
• Avalanche’s
  big
  upgrade
• L2
  teams
  beam
  over
  Beam
  Chain
• Sui
  suffers
  a
  brief
  outage
• Bitcoin
  bridged,
  trustlessly

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in
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latest
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Protocol,
our
weekly
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exploring
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behind
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Network
news

BEAMING
OVER
THE
BEAM
CHAIN:
What’s
good
for
the
L1
is
good
for
the
L2s.
That’s
the
assessment
the
teams
behind
zkSync
and
Polygon,
two
of
the
leading
layer-2
networks
running
on
top
of
Ethereum,
gave
of
Justin
Drake’s
proposal
to
overhaul
the
$400
billion
blockchain,
dismissing
suggestions
it
would
make
their
auxiliary
networks
redundant.
“That’s
really
a
misconception,”
said
Alex
Gluchowski,
the
CEO
of
Matter
Labs,
the
developer
firm
behind
zkSync.
“The
changes
that
Justin
announced
are
focused
on
the
consensus
layer,
not
on
the
execution
layer.
It’s
not
going
to
affect
the
execution
layer.”
In
addition
to
incorporating
ZK,
Drake’s
proposal
seeks
to
shorten
block
times,
which
could
cut
transaction
costs
for
L2s
settling
on
Ethereum.
Drake
also
said
he
wants
to
introduce
single-slot
finality,
meaning
blocks
with
transaction
data
could
be
finalized
immediately,
and
that
information
would
become
permanent
right
away.
“All
of
those
things
are
great
because
we
depend
on
Ethereum
as
the
global
settlement
layer,”
Gluchowski
said.
Brendan
Farmer,
a
co-founder
at
Polygon,
also
told
CoinDesk
he
doesn’t
think
the
Beam
Chain
would
obsolesce
layer-2s.
Instead,
he
said,
the
upgrade
would
“make
rollups
work
better.”
However,
others
in
the
crypto
community
were
underwhelmed
by
the
whole
plan,
lamenting
in
particular
that
Drake’s
five-year
timeline
wasn’t
ambitious
enough,
leaving
ample
room
for
centrally-developed
chains
like
Solana
to
eat
Ethereum’s
lunch.”

Read
more

SUI
OUTAGE:
Sui
Network
(SUI),
a
relatively
new
blockchain,
experienced
an
unexpected
two-hour
outage
on
Thursday.
The
downtime
was
caused
by
a
bug
in
its
transaction
scheduling
logic,
which
led
to
its
validator
network
crashing.
The
issue
was
resolved,
the
network
said.
Blockchain
outages
can
take
place
for
a
plethora
of
reasons,
ranging
from
a
51%
attack
to
technical
errors.
A
common
error
is
that
of
nodes
–
or
individual
entities
that
process
transactions
–
being
unable
to
sync
with
each
other,
causing
the
blockchain
to
go
offline.
Software
bugs
may
be
another
error
vector,
where
outdated
code
can
render
the
network’s
processes
inoperable.

Read
more

STAKING
ON
STARKNET:
Starknet
has
become
the
first
major
rollup
blockchain
running
on
top
of
Ethereum
to
let
users
earn
money
by
staking
their
tokens
and
validating
transactions.
(Metis
was
the
first
layer-2
to
do
so
but
is
far
smaller
and
is
an
“optimium,”
a
different
kind
of
L2.)
Now,
anyone
who
has
at
least
20,000
STRK
tokens
(roughly
$12,000
at
recent
prices)
can
pledge
the
asset
as
collateral
and
earn
rewards
for
validating
transactions.
Users
with
less
than
20,000
STRK
can
delegate
their
tokens
to
validators
to
stake
on
their
behalf.
(Validators
that
behave
maliciously
or
neglect
their
duties
stand
to
forfeit
staked
tokens.)
Validators
and
delegators
that
want
to
withdraw
staked
tokens
must
wait
21
days
to
receive
them
as
well
as
any
rewards
earned
from
staking.
Implementing
staking
on
Starknet
is
part
of
a
multiphase
plan.
During
this
first
phase,
StarkWare,
the
company
developing
Starknet
will
study
staking
habits
on
the
network,
and
from
there
will
assess
whether
and
how
its
validators
can
be
given
the
additional
responsibilities
of
creating
and
“attesting,”
or
confirming,
blocks
in
the
protocol.

Read
more

AVALANCHE’S
BIG
UPGRADE:
Avalanche,
the
eighth-largest
blockchain
by
total
value
locked
(TVL),
is
moving
ahead
with
a
major
technical
makeover.
The
Avalanche9000
upgrade
went
live
in
a
test
network
environment
Monday,
bringing
the
changes
one
step
closer
to
the
main
network.
Avalanche9000
will
be
the
largest
upgrade
that
Avalanche
has
seen.
It
is
designed
to
cut
the
costs
of
sending
transactions,
operating
validators
and
building
apps
on
the
network,
whose
native
token
(AVAX)
is
the
11th-largest
cryptocurrency,
with
a
$16
billion
market
cap.
The
foundation
is
trying
to
attract
developers
to
Avalanche
and
encourage
users
to
create
customized
blockchains
using
its
technology,
known
as
subnets.
Somewhat
confusingly,
subnets
are
now
officially
referred
to
in
the
Avalanche
community
as
“L1s,”
even
though
they
are
roughly
analogous
to
the
layer-2,
or
L2,
networks
that
augment
Ethereum
and
other
blockchains.
(Avalanche’s
“primary
network,”
the
equivalent
of
a
layer-1
in
other
ecosystems,
is
considered
a
subnet.)
The
team
is
hoping
to
bring
Avalanche9000
to
mainnet
by
yearend.
Among
other
changes,
9000
would
allow
for
a
new
type
of
validator
with
which
anyone
can
launch
their
own
subnets.

Read
more

ONE-WAY
TICKET:
BitcoinOS,
a
smart
contract
project
led
by
crypto
O.G.

Edan
Yago,
has
executed
what
it
bills
as
the
first
trustless
bridge
transaction
for
any
blockchain.
Using
zero-knowledge
cryptography,
a
nominal
amount
of
bitcoin
(0.0002
BTC,
about
$19
and
change)
was
locked
up
on
the
main
blockchain’s
testnet,
and
a
proof
was
generated
minting
tokens
on
the
testnet
for
Merlin
Chain,
a
layer-2
network.
No
oracle
or
custodian
was
involved,
according
to
BitcoinOS.
For
now,
however,
Merlin
Chain
is
like
the

Hotel
California
or
a

roach
motel
for
the
bridged
BTC.
“This
is
one
half
of
the
bridge
showing
the
ability
to
bridge
assets
from
Bitcoin
to
an
EVM,”
BitcoinOS
said
in
a
press
release.
“Once
the
other
half
of
the
bridge
is
completed,
Merlin
Chain
users
can
settle
their
Bitcoin-pegged
assets
back
to
the
mainchain
by
proving
that
the
tokens
were
burned.”

Ethereum’s
Blob
Mob

Usage
of
binary
large
objects,
or
blobs,
has
surged
on
the
Ethereum
network,
signaling
that
more
users
are
embracing
layer-2
scaling
tech
for
faster
and
more
affordable
transactions.

This
year,
Ethereum’s
Dencun
upgrade
introduced
blobs,
which
allow
large
chunks
of
data
to
be
temporarily
attached
to
transactions,
and
later
deleted
after
the
data
is
verified.
(You
can
think
of
a
blob
as
a

sidecar
that
rides
along
with
a
motorcycle
for
a
time
but
eventually
gets
detached
and
discarded.)
Layer-2
protocols
such
as
BASE,
Arbitrum,
and
Optimism
use
blobs
to
bundle
transactions
together,
process
them
off-chain
and
then
post
them
to
the
Ethereum
main
chain
for
verification
without
permanently
gumming
up
the
works.

The
number
of
blobs
posted
to
the
network
consistently
averaged
more
than
21,000
this
month,
matching
the
record
activity
seen
in
March,
according
to
pseudonymous
data
analyst
Hildobby’s

Dune
Analytics
dashboard.

Posting
blobs
costs
a
fee,
which
fluctuates
depending
on
network
conditions.
The
fees
are
paid
in
Ethereum’s
native
token
ether,
and
are
burned
just
like
regular
transaction
fees,
taking
supply
of
ETH
off
the
market,
a
positive
for
the
coin’s
price.

In
this
way,
blobs
mitigate
the
much-discussed
cannibalization
of
the
main
chain
by
L2.

The
blob
base
submission
fee
spiked
as
high
as
$80
on
Monday,
the
highest
since
March,
and
the
average
number
of
blobs
posted
in
each
Ethereum
block
rose
to
4.3.
More
importantly,
blob
fees
have
burned
over
214
ETH
worth
$723,000
over
the
last
seven
days,
the
sixth
largest
source
of
fee
burns
on
the
network
over
that
period,
according
to
data
from
ultrasound.money.

CLICK
HERE
FOR
THE
FULL
ANALYSIS
BY
COINDESK’S
OMKAR
GODBOLE

Money
Center

Vibe
shift

Not
just
fun
and
games?

Bringing
in
the
big
Sun

“Reports
are
greatly
exaggerated”

Calendar

• Dec.
  4-5:
  
  India
  Blockchain
  Week,
  Bangalore
• Dec.
  5-6:
  
  Emergence,
  Prague
• Dec.
  9-12:
  
  Abu
  Dhabi
  Finance
  Week
• Dec.
  11-12:
  
  AI
  Summit
  NYC
• Dec.
  11-14:
  
  Taipei
  Blockchain
  Week
• Jan
  9-12,
  2025:
  
  CES,
  Las
  Vegas
• Jan.
  15-19:
  
  World
  Economic
  Forum,
  Davos,
  Switzerland
• January
  21-25:
  
  WAGMI
  conference,
  Miami.
• Jan.
  24-25:
  
  Adopting
  Bitcoin,
  Cape
  Town,
  South
  Africa.
• Jan.
  30-31:
  
  PLAN
  B
  Forum,
  San
  Salvador,
  El
  Salvador.
• Feb.
  1-6:
  
  Satoshi
  Roundtable,
  Dubai
• Feb.
  19-20,
  2025:
  
  ConsensusHK,
  Hong
  Kong.
• Feb.
  23-24:
  
  NFT
  Paris
• Feb
  23-March
  2:
  
  ETHDenver
• May
  14-16:
  
  Consensus,
  Toronto.
• May
  27-29:
  
  Bitcoin
  2025,
  Las
  Vegas.