Welcome to the latest edition of our Ethereum Weekly Digest, where we break down the most significant developments, trends, and analyses from the past week in the Ethereum ecosystem. This issue covers key technical updates, market movements, and major events that are shaping the network's future.
Quick Industry Overview
Blockchain News Highlights
Ethereum co-founder Vitalik Buterin recently emphasized that synchronous atomic composability is overvalued. He pointed out that common user issues, like transferring assets between Layer 2 solutions, are primarily UX challenges rather than technical limitations. Solutions include widespread adoption of ERC-3770, cross-L2 swap protocols like ERC-7683, and better wallet integrations.
Base announced that its Base Sepolia testnet will introduce fault proofs in mid-July. Withdrawals will no longer be instant and will require at least seven days to finalize, depending on dispute resolution outcomes.
Paradigm has open-sourced Revmc, an EVM compiler that shows performance improvements of 1.85x to 19x in various benchmarks. It has been integrated into Reth and successfully synced with the chain.
LayerZero officially revealed the token economics for ZRO, with a total supply of 1 billion tokens. 38.3% is allocated to the community, 32.2% to strategic partners, and 25.5% to core contributors.
Polkadot’s new RFC-0092 proposal suggests reducing the staking token unlock period from 28 days to just two days to improve user experience while maintaining network security. Additionally, co-founder Rob Habermeier proposed the creation of Plaza, a new system chain aimed at unifying parachain functionalities and enhancing scalability.
Blast confirmed that its airdrop is one week away. DApps must distribute all Gold and Points to users' externally owned accounts (EOAs) by June 25 to be included. Points or Gold remaining in smart contracts will be excluded.
RISC Zero launched zkVM 1.0, a production-ready version of its general-purpose zkVM. It can generate proofs for any program written in Rust and is compatible with multiple chains for verification.
Starknet community released updates for v0.13.2 and its summer roadmap. The August update aims to reduce block time without increasing L1 costs, targeting an average transaction confirmation time of around two seconds. Versions 0.13.3, expected in October or November, will feature Cairo-native for faster execution.
Investment and Financing Report
From June 15 to June 21, the sector saw 14 investment rounds, totaling $232 million in raised funds. Infrastructure projects secured three rounds, asset management six, and gaming/AI and cybersecurity three each. Four rounds exceeded $10 million, including Lens Protocol, Lightspeed, Spartan Group, and Espresso.
👉 Explore detailed investment insights
Key Data Trends
L2BEAT data from June 24 shows the total value locked (TVL) in Layer 2 solutions at $42.5 billion, a 7-day decrease of 4.41%. Arbitrum fell 3.4%, Base 5.51%, and Optimism 8.32%. ZKsync Era, possibly influenced by its airdrop, saw a massive 68.08% TVL increase to $12.9 billion.
Ethereum beacon chain staking has reached 33,215,233 ETH, representing 27.72% of the total supply. Lido dominates liquid staking with a 28.78% market share.
Pantera Capital data indicates that over 60% of May’s DEX incremental volume occurred on Solana. Its share of DEX trading volume rose from 0% in early 2021 to 24% in May 2024. Unique active addresses on Solana grew from 14,000 in October 2020 to nearly 1.3 million in May 2024.
Despite ZKsync Era’s airdrop confirmation, The Block reports a decline in its transaction volume and active addresses. The 7-day moving average of active addresses dropped over 50% from February’s peak, and transactions fell nearly 70%.
Ethereum’s ecosystem TPS hit a record high due to a spike in L3 activity. On June 16, L2 and L3 scaling networks processed 246.18 TPS, equating to an estimated 21.2 million transactions daily. Over 41% of these transactions occurred on Xai, an Ethereum L3 focused on gaming.
By the end of Q2, about 55% of Uniswap’s monthly active users came from Base, up from roughly 20% at the start of the quarter.
In-Depth Analysis
Latest Ethereum Core Developer Meeting
Developers discussed progress on the Pectra Devnet 1 testnet, focusing on execution layer-triggered validator mergers and the replacement of EIP 3074 with EIP 7702. Client teams shared updates on implementation challenges.
The meeting also covered Ethereum Virtual Object Format (EOF) status, confirming it won’t be tested on Devnet 1 and will be debugged against the latest Pectra specs. Discussions included EIP 7702’s revocation mechanism and plans for Devnet 1 and 2, though some expressed concerns about code complexity.
A new GitHub page, "eth-clients," was introduced to provide configuration resources for mainnet and testnets, with encouragement for client teams to contribute.
Rising Blob Market Fees
Ethereum mainnet has seen a significant increase in Blob Base Fee, driving up L2 transaction costs. This highlights inefficiencies in the current gas market, where low base fees don't prevent market inefficiencies due to mismatched transaction types and fee structures.
Suggestions to address this include adding tips for blobs, adjusting mempool rules, implementing censorship heuristics, and considering proposals like EIP-7706.
LayerZero Airdrop Aftermath
LayerZero’s ZRO airdrop on June 20 was marked by strict sybil address controls, flagging around 2 million addresses. This led to a 91% drop in on-chain interactions. The "proof-of-donation" mechanism, requiring donations to claim tokens, faced community backlash due to high gas fees and complex processes.
While the airdrop benefited genuine users, the sybil hunting and subsequent list publication did little to boost on-chain activity. Restoring user confidence and activity remains a critical challenge.
Curve Founder Liquidation Event
Curve Finance founder Michael Egorov used $141 million worth of CRV as collateral to borrow stablecoins across DeFi platforms. Sharp CRV price swings led to the liquidation of his positions on June 13, causing over $1 million in bad debt on Curve’s Llamalend and a 25% price crash.
This event triggered liquidations across platforms, significantly reducing Curve’s TVL and on-chain metrics. It underscored the risks in DeFi lending and leverage, even as Egorov and some investors profited.
CertiK and Kraken Security Dispute
Kraken accused security firm CertiK of exploiting a vulnerability to extract nearly $3 million, calling it extortion and a criminal matter. CertiK denied the claims, stating Kraken failed its tests and threatened employees.
The community questioned CertiK’s ethics, noting its controversial history with audited projects being hacked. The public dispute highlights the tensions between security auditors and platforms.
Frequently Asked Questions
What is Ethereum’s Pectra upgrade?
Pectra is the next major Ethereum upgrade, focusing on improvements like EIP 7702 and execution layer changes. It aims to enhance scalability and user experience through testnets like Devnet 1 and 2.
Why did Blob fees increase recently?
Blob fees surged due to heightened demand and inefficiencies in Ethereum’s fee market. This increased costs for Layer 2 transactions, prompting discussions about market reforms.
How did LayerZero’s airdrop affect user activity?
The airdrop’s sybil measures and donation requirement led to a significant drop in interactions, as many users felt the process was overly complex and costly.
What caused the Curve founder’s liquidation?
Michael Egorov’s leveraged positions were liquidated after CRV’s price dropped sharply, causing widespread liquidations and losses in the DeFi ecosystem.
What was the outcome of the CertiK-Kraken dispute?
The public argument raised concerns about security practices and ethics, but no resolution has been disclosed yet. Both parties maintained their positions amidst community scrutiny.
How can I stay updated on Ethereum developments?
Join community calls, follow core developer meetings, and monitor reliable news sources for the latest on upgrades, market trends, and ecosystem changes.