Krystal Newsflash (22nd July 2022)
Welcome to our recap of the major stories in the crypto world! Lots of exciting things have happened this week, and here’s the TL;DR version:
Is Polygon the next big thing? 👀
Polygon has announced that they are building a zero-knowledge (ZK)-Ethereum Virtual Machine (EVM) Layer-2 solution.
Polygon currently operates as a sidechain to Ethereum, which is a different scaling solution from ZK-rollups.
One of the major concerns of Polygon as a sidechain is that they do not inherit the security of Ethereum.
Polygon relies on their own Proof-of-Stake consensus mechanism to secure the network, which could be compromised independently of Ethereum.
With this new development, Polygon will provide a solution that is:
- Ethereum-equivalent: developers are able to port their code directly from Ethereum to Polygon
- Secure: the zkEVM network is able to utilise the security of Ethereum
- Scalable: ZK rollups are considered to be ‘better’ than optimistic rollups, but are far more complex
This is a huge development as some of the current ZK rollups are not EVM-compatible.
Coupled with their recent news of being a part of the Disney Accelerator Programme, Polygon is definitely going places!
Tesla 🙅♂️ BTC?
During its Q2 earnings report, Tesla has sold $936 million worth of BTC, which is around 75% of its entire holdings.
Elon Musk stated that this was due to Tesla wanting to maximise its cash position, “given the uncertainty of the COVID lockdowns in China.”
Nevertheless, Musk said that Tesla is still open to holding BTC in the future, and this selloff “should not be taken as a verdict on BTC”.
The most interesting point was that Tesla did not sell any of their Dogecoin holdings.
Celsius isn’t playing nice 🤷
Amidst the filing for bankruptcy by Celsius, they are now trying to argue that crypto users who deposited the funds actually gave control to the platform.
This was due to a clause in Celsius’ Terms of Service, which does not guarantee the return of users’ funds.
Amidst this turmoil, Zipmex, a Southeast Asian exchange, has started to halt withdrawals as well.
This was most likely because Zipmex lent out $53 million to crypto lenders like Celsius and Babel Finance.
You can find out more about why crypto lending platforms have started to pause withdrawals here, as well as some of the lessons we can learn from this crash.
NFT trading volume ⏬
NFTs, which was once the hype, may have started to lose its demand.
Trading volumes have decreased across the board.
Interestingly, Magic Eden, a Solana NFT marketplace, has been stealing some of OpenSea’s market share.
You can create a wallet using the Krystal mobile app to store NFTs on the Solana network, as well as 9 other EVM-compatible networks.
Amidst this lower demand for NFTs, Minecraft has started to prevent NFTs from being integrated with their servers.
Crypto bills on BTC 📝
BTC and its impact on the environment have been closely scrutinised, especially by regulators.
Paraguay has passed a bill to regulate crypto mining in the country, where there have been concerns over the increase in electrical consumption in the country.
Meanwhile, Sweden’s Energy Minister, Khashayar Farmanbar, mentioned that Sweden needs ‘energy for more useful things than Bitcoin’.
The concerns regarding the environmental impact of the Proof-of-Work (PoW) consensus mechanism is one of the major reasons why Ethereum is transitioning from PoW to Proof-of-Stake (PoS).
In fact, this transition (The Merge) is happening very soon, and you can find out more about what it means here.
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