The Protocol: CZ’s out, Altman’s in, and Kraken’s Sued

The
tech
news
cycle
this
past
week
was
dominated
by
the
straight-out-of-HBO
boardroom
drama
at
OpenAI,
but
the
crypto
world
–
not
to
be
outdone
by
its
AI
brethren
–
has
brought
its
own
bombshells.

The
big
story
this
week
was
around
Binance,
whose
high-profile
CEO,
Changpeng
“CZ”
Zhao,
will
be

stepping
down
from
his
post
at
the
company
as
part
of
a
sweeping
plea
agreement
with
U.S.
prosecutors.
The
world’s
largest
crypto
exchange,
Binance
will

pay
over
$7
billion
in
fines
to
the
U.S.
Treasury
and
Commodity
Futures
Trading
Commission
in
“one
of
the
largest
penalties”
the
U.S.
has
ever
obtained
from
a
corporate
defendant
–
money
that
could
help
the
industry
avoid
yet
another
blockbuster
criminal
trial.
Zhao
has
long
been
a
controversial
figure
in
the
crypto
space
–
owing
largely
to
the
opaque
nature
of
his
exchange
giant,
whose
centralized
command
structure
and
shadowy
inner
workings
fly
in
the
face
of
core
blockchain
tech
principles
around
transparency
and
decentralization.
But
as
Zhao’s
tenure
at
Binance
was
eulogized
across
X
(formerly
Twitter)
this
week,
fans
(and

even
some
critics)
credited
him
for
spearheading
a
period
of
tremendous
growth
for
the
broader
industry
–
even
as
it’s
now
clear
that
Binance’s
own
rise
came
at
the
cost
of
U.S.
sanction-incompliance
and
in
brazen
defiance
of
money-transmitting
laws.

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article
is
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ORACLES’
NEED
FOR
SPEED:
A
single
millisecond
can
make
or
break
a
trade
in
the
world
of
traditional
finance,
but
decentralized
finance
apps
tend
to
operate
on
a
much
slower
timescale
–
with
certain
market
data
taking
minutes
or
even
hours
to
populate
on-chain.
The
year
2023
has
marked
a
breakout
in
the
race
to
provide
lower-latency
pricing
data
to
blockchains,
with
oracle
firms
like
Chainlink
and
Pyth
Network
duking
it
out
in
a
battle
to
make
on-chain
trading
more
hospitable
to
speed-obsessed
Wall
Street
speculators
and
high-frequency
traders.
Developers
use
oracles
to
shepherd
off-chain
data,
like
token
prices,
onto
(or
between)
blockchains.
The
main
issue
until
recently
has
been
the
inherent
latency
in
decentralized
networks,
where
geographically
distributed
nodes
take
time
to
reach
consensus,
leading
to
delays
that
can
slow
down
data
from
oracles.
Chainlink,
a
frontrunner
in
the
oracle
space,
recently
introduced
Data
Streams
to
reduce
latency
and
operational
costs,
offering
a

pull-based
oracle
system
that
enhances
efficiency.

Pyth
Network,
an
oracle
firm
that
was
in
the
news
this
week
for
its
token
airdrop,
has
also
been
an
early
mover
in
the
latency
race
–
it’s
been
particularly
active
on
the
Solana
blockchain,
where
it
offers
low-latency
pricing
data
sourced
directly
from
first-party
financial
firms.
Other
players
in
the
oracle
race
include
Band
Protocol,
Witnet,
Tellor,
XYO
Network,
Razor
Network
and
WINkLink.
A
key
focus
for
the
sector
moving
forward
will
be
reconciling
tradeoffs
between
speed,
reliability,
and
decentralization
–
a
balancing
act
for
virtually
all
crypto
protocols,
but
one
that’s
particularly
prescient
in
the
context
of
critical
oracle
infrastructure.

Highlighting
blockchain
tech
upgrades
and
developments.

1.

Fhenix,
which

announced
a
$7M
fundraising
in
September
to
build
a
“confidential
blockchain”
powered
by
fully
homomorphic
encryption
or
(FHE),
disclosed
Thursday
that
it
is
“introducing
FHE
Rollups
to
boost
privacy
on
Ethereum
and
similar
networks.”
According
to
a
message
from
the
team:
“These
rollups
enable
secure
on-chain
transactions
and
private
applications,
letting
developers
craft
confidential
layer-2
networks
while
staying
compatible
with
Ethereum.”
Fhenix
founder
Guy
Zyskind
told
CoinDesk
in
an
interview
that
“We’re
going
to
have
our
canonical
Fhenix
L2
mainnet,”
but
also
“We’re
trying
to
be
the
encrypted
rollup
stack”
that
builders
can
use
to
create
their
own
networks.

2.
DLN,
which
stands
for

deSwap
Liquidity
Network,
a
cross-chain
trading
infrastructure
build
on

deBridge,
has
entered
into
a
strategic
partnership
with
bloXroute,
a
DeFi
performance
provider,
“to
provide
MEV
searchers,
institutional
DeFi
traders
and
projects
with
lightning-fast

intents-based
cross-chain
value
exchange,”

according
to
the
team.
(EDITOR’S
NOTE:
Please
go

here
for
my
piece
last
week
on
what
“intents”
are
and
why
they’re
becoming
an
important
design
concept
in
blockchain
technology.)

3.
Frax
Finance’s
community
has

approved
a
plan
to
use
Axelar,
a
protocol
for
secure
cross-chain
communication,
for
expansion
to
additional
chains.

4.
Strike,
a
bitcoin
payments
firm,
has

expanded
its
services
to
allow
users
from
36
countries
(soon
to
be
65+)
beyond
the
U.S.
to
buy
bitcoin
through
its
app.

5.


ZkLink,
a
developer
of
zero-knowledge-proof-powered
blockchain
solutions,
announced
the

launch
of
Nexus,
a
production-ready
and
highly
customizable
layer-3
or
“L3”
designed
to
bridge
the
gap
among
different
ZK
Rollup
layer-2
or
“L2”
ecosystems,
to
reduce
liquidity
fragmentation,
according
to
the
team.

See
the
entire
Protocol
Village
list
from
this
past
week
here.

Funraisings

Deals
and
grants

Data
and
tokens

Regulatory,
Policy,
and
Legal