ProgPow Uproar Pits Ethereum Core Devs Against Influencers and Dapp Builders
Also, Nexus Mutual discloses vulnerabilities, Coinbase Wallet becoming more DeFi friendly, Melon launches new interface.
|Feb 26|| 1|
Hello Defiers! Lots going on in decentralized finance,
ProgPow surprise approval causes community backlash
Nexus Mutual patched two vulnerabilities
Coinbase Wallet integrates human-readable Ethereum addresses
Melon protocol launches improved asset management interface
and more :)
ProgPow Approval Spurs Ethereum Influencer Uproar
A controversial change to Ethereum’s mining algorithm was unexpectedly approved in the most recent developers’ call, spurring a backlash from the community.
This matters to decentralized finance because as of today, most of the ecosystem is being built on Ethereum. If this contentious change is pushed through as scheduled in July, some fear it could cause the chain to split. This means DeFi itself could split, as some projects could choose to go to the new chain, while some stay in the old one, reducing composability, which has been one of DeFi’s main features. For more on this, read Dragonfly Research’s post “Ethereum is now unforkable, thanks to DeFi.”
ProgPoW (programmatic proof-of-work) is a consensus algorithm designed to reduce the advantage of ASICs, high-performance chips used for mining. The mechanism would favor miners using general-purpose graphics units, or GPUs, with the goal of avoiding centralization among the fewer players able to invest in the more specialized hardware. While the community has discussed implementing ProgPow since Bitmain released an Ethereum-specific ASICs miner in 2018, many in the community understood there hadn’t been enough support for it to move forward, so they were surprised when it was approved on Friday’s core developer’s call.
Ethereum creator Vitalik Buterin said the proposal was “ninja approved,” and that discussion about it “went from ‘phew, this thing is gone and has not been talked about for quite a while’ to ‘OMG it's now SCHEDULED FOR THE NEXT HARDFORK???!’ within the span of 1.5 hours.” He proposed to improve governance so that proposals that the community rejects don’t make it through to the network’s planned upgrades.
A vote held by MolochDAO, an organization which funds Ethereum-based projects, showed members of the group were overwhelmingly against ProgPow, while many other community members took to Twitter to voice their discontent, including in at least one poll with over 2k votes, which sided for no.
It seems as though ProgPow has divided the Ethereum community between core developers, and influencers and dapp builders on this. Here are the main arguments for and against so you can decide for yourself.
For ProgPow and having a mining algorithm that hinders ASIC miners and favors GPU miners:
Reduces risk of miner centralization, as GPUs are more affordable and a larger number of miners would be able to contribute to the network
ASICs are network-specific, meaning the hardware can’t be re-used to mine other coins. This would reduce incentives to launch attacks on the network
Ethereum algorithm ETHash was always meant to be ASIC-resistant
Against ProgPow, and keeping the ETHash algorithm as is, which would benefit ASICs miners:*
Not enough support for ProgPow raises the risk of a contentious fork, which would split the Ethereum chain
Concern that Ethereum governance was captured by those who have a vested interest in favoring GPU mining, even if a change doesn’t necessarily benefit the network
The change is an unneeded distraction from more important issues like ETH2
*Thanks to Scott Lewis and Eric Conner for helping me compile these.
The ProgPow decision may be a test on whether non-core Ethereum developers can sway governance decisions.
Exploit Season: Nexus Mutual Patched Two Vulnerabilities
DeFi investors may need to find ways to take insurance against insurers failing.
Nexus Mutual last week moved to prevent two potential ways to exploit the decentralized insurance system after it was alerted to the vulnerabilities by securities experts Mudit Gupta and Samczsun. The disclosure came after traders made almost $1 million by exploiting DeFi platforms, including bZx.
One of the issues reported was a potential governance attack, while the second put part of the funds in the mutual at risk by relying on Uniswap’s spot market prices in some cases. The second vulnerability, spotted by Samczsun, was similar to the one hackers used to exploit bZx. The Nexus Mutual team implemented solutions for both vulnerabilities and paid bounties of $7,000 to the security researchers.
Coinbase Introduces Human-Readable ETH Addresses
Coinbase Wallet is becoming increasingly Ethereum and DeFi friendly. Coinbase Wallet launched support for sending crypto to Ethereum Name Service addresses (like johndoe.eth) instead of traditional crypto addresses (like 0x89136a83664fa0673930be34463e444260775dc). Coinbase Wallet usernames are also supported.
“We believe these improvements will make cryptocurrency much easier to use and help drive adoption with a more mainstream audience. Users can now easily send money to friends and business partners like they do with traditional payment apps, albeit globally and in crypto.”
Melon Launches New Interface for Decentralized Asset Management
Melon protocol’s lead developer Avantgarde Finance launched the Melon Terminal, a new, browser-based interface to improve user experience, performance and stability of the decentralized fund management platform. Melon allows anyone to deploy their own funds and anyone to invest in these funds. The protocol plans to integrate lending protocols to provide traders with a way to manage all Ethereum-based investments in one place.
“In a nutshell, Melon powers the full asset management stack in an entirely automated and democratized way […] This used to cost hundreds of thousands of dollars, take several months and involve a lot of paperwork. Now you can do this with a couple bucks, under 10 minutes and from the comfort of your sofa,” the release said.
CryptoKitties Maker Dapper Labs Partners With UFC
Dapper Labs, the creator of CryptoKitties and the non-fungible token standard, announced a new licensing partnership with Ultimate Fighting Championship, the Las Vegas-based mixed martial arts promotion company. UFC and Dapper Labs agreed to develop UFC-branded digital collectibles on Dapper Labs' Flow platform for fans to buy and trade.
Chainlink Paving the Way to Become Polkadot’s Price Oracle Provider
Chainlink completed an initial integration with a Substrate-based blockchain. Substrate is a blockchain framework used by the Polkadot network. This is the first blockchain ecosystem outside of Ethereum that Chainlink will support.
“By being the first Substrate-based oracle solution, Chainlink is set to become the first and primary oracle provider for all Substrate-based chains and eventually the entire Polkadot network,” the release said.
Taylor Monahan of MyCrypto highlights the high risks of decentralized finance. “With DeFi, we love to think about it as “DeFi Lego” but if the foundation is not solid, it’s actually “DeFi Jenga” and we’re going to fall on our face.”
Chris Blec announced DeFi Watch, a blockchain-agnostic project dedicated to monitoring and reporting centralization risks associated with decentralized finance protocols, products and applications.
Gnosis founder Martin Koppelman stirred crypto Twitter by comparing Bitcoin and Ethereum’s monetary policy.
Peter Todd @peterktoddThe Bitcoiners are equally guilty! 21 million BTC is practically a religion, and anyone with any economic sense knows that we do have a high inflation rate and do just fine, and the difference between 0% and 0.5% is as insignificant as it sounds. But again, motivated reasoning.
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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.