The most interesting tech news in crypto today is @0xPolygon's utilization of @SuccinctLabs SP1 tech for their AggLayer Pessimistic proofs

This is a big deal because it represents a turning point in the competition between specialized ZK circuits and generalized zkVMs

This thread explains why this event will have long-lasting effects on the development of zk-based applications 2/ First, what is the difference between customized zk circuits and generalized zkVMs

Customized zk circuits
It means developing a specialized zk circuit to perform a specific function

(+) Achieving the best performance in proof generation latency and verification time
(-) Requires specialized skills and domain-specific languages (DSLs)
(-) Longer development time

Crypto is (was?) about solving hard problems with innovative tech

Bitcoin removed rent-seeking intermediaries
Ethereum allowed applications to be developed and used globally without permission

That's why I consider accepting MEV, in its current form, as mental laziness

https://twitter.com/MohamedFFouda/status/1790812586650280016

2/ Yes, MEV is deeply integrated into existing crypto networks that broadcast transactions transparently

Flashbots was the first effort to shed light on the MEV dynamics, create tools to investigate it, protect from it, and democratize participation in MEV

This was a first step and clearly is not enough as a final solution

The indictment from the DOJ for the traders who baited MEV bots is mind-blowing 🤯

It dives into every detail of how the Ethereum block building works and draws analogies to TradFi

This is both
1. A recognition of the power of Ethereum to settle financial transactions
2. A trap to pull every operator on Ethereum into a web of legal compliance requirements 2/ This case is a unique precedent and will have long-lasting impacts.

The positive thing is that recognizes Ethereum as an established way to settle transactions and that attacking this network is an issue that affects the network users

All upcoming Bitcoin L2s are building their own bridges

However, the better approach is to learn from the journey of Ethereum rollups and prioritize aggregated bridging

Aggregated bridging will solve many existing issues for Bitcoin L2s 2/ Bitcoin trust-minimized L1 - L2s bridging is an unsolved problem.

Bitcoin L2 projects try to differentiate by building more secure bridging

Some use decentralized multisign, e.g., @Stacks & @BotanixLabs , others are developing BitVM-based bridges, e.g., @citrea_xyz

Among the upcoming Bitcoin L2 projects, it's easy to recognize two clear marketing approaches
1. Technical marketing: promoting the L2 tech features
2. Liquidity marketing: attracting contributors to contribute liquidity 2/ In the first camp, projects focus on featuring the technical architecture of their L2s
- How to improve the security of the L2 BTC bridge
- How the L2 depends on the L1 security
- Explaining the rational of their design choices

Dymension went out of the gate with a $6B FDV (almost double of $Atom) which may seem surprising

However, @dymension has a simple & interesting vision: replacing Ethereum as the consensus layer for app rollups 2/Existing optimistic rollups depend on Ethereum for consensus (validating fraud proofs). They can use external DA, e.g., Celestia, to reduce the rollup tx costs.

Dymension offers the same solution via the RollApps but replaces Ethereum as the consensus layer

1/ As Bitcoin moves to the phase of ETF & institutional adoption, it's important to focus on protecting the permissionless nature of BTC from TradFi capture.

The way to do so is by encouraging permissionless applications on Bitcoin. For that, Bitcoin L2s take center stage 2/ Bitcoin L2s answer the eternal question: "Who to add trustless programmability to Bitcoin?"

L2s can have turing-complete VMs and permissionless applications and still benefit from tight coupling to the Bitcoin L1

Bitcoin L2s are thriving because of multiple innovations such as zkVMs, Inscriptions, and BitVM

1/ Lack of on-chain privacy is one of the biggest issues in crypto

Although zk solutions, e.g., Aztec, enable private transactions and compute over private data, they have a major problem: handling private shared state

This is where FHE and startups like @inconetwork shine 2/ First, why do we need a private shared state?

A private shared state can be the tally of a private on-chain voting

It can also be the state of a poker game or the state of a dark AMM pool

Private shared state enable use cases that haven’t been possible in crypto

1/ At @alliancedao we are bullish on DePIN especially networks that tackle existing pain points

Blockcast (ALL11 cohort) is exactly that type

@BlockcastNet tackles the problem of increased demand for video delivery by building a Decentralized Broadcast Delivery Network. 2/ To understand the problem better, it suffices to say that video content represents 65% of all internet traffic, and this percentage is only expected to grow as the online audience grows, and demands higher-resolution content

Earlier, I discussed horizontal scaling for scaling app rollups with a focus on fully on-chain games.

Horizontal scaling works well for single-player games.

For multiplayer games, zk state channels are a better scaling option.

So, what are zk state channels? 2/ State channels are not new. In fact, they were among the earliest scaling solutions for Ethereum.

A state channel is essentially
- taking a part of the on-chain state
- continuously changing this state off-chain
- committing the final state on-chain when needed.

One year after the Merge, the number of staked ETH has almost doubled from ~ 13.5M ETH to ~ 25.7M ETH today. This represents 21% of the ETH supply.

This is great for the network, right?

Well almost, but it isn’t all good news! 2/ During the same period of time, the number of ETH liquid staking tokens (LSTs) more than doubled to exceed 11.7M ETH today.

This is more than 45% of all the staked ETH.

So what is the problem?

LSTs reduce the security budget of the Ethereum Network.

1/ In my new article with @QwQiao we discuss the advancements in zero-knowledge technology and what is needed to achieve mainstream adoption.
medium.com/alliancedao/zk… 2/ Our goal is to identify areas where Web 3 founders can deliver the most impact while pushing the ZKP technology forward. At @alliancedao we are looking to support and fund founders building in these areas.

1/ My new article discusses why founders should, or shouldn’t, consider building an appchain for their application.
Appchain advantages, risks, and startup ideas to tackle these risks are discussed.

Please reach out if you are building in this area!
medium.com/alliancedao/th… 2/ First, what is an appchain?
An appchain is dedicated blockchain that runs only a single application, e.g., AMM, a game, etc. So the application. The appchain is optimized to deliver the throughput and functionality needed by the application.

1/n There is a strong trend of new L1s that focus on parallel execution. Prominent projects in this domain are @fuellabs_ , @AptosLabs, @Mysten_Labs’s Sui and @linera_io.

My new article discusses these projects and the challenges that face them. medium.com/@fouda/90bac38… 2/n The idea of parallel execution of blockchain TXs is not new. As the EVM architecture is incapable of improving throughput through parallelism, Ethereum’s competitors are building a differentiation in this area.

1/ If you want to know which sector I predict to give rise to the next crypto unicorns, read my new article in @tokendaily's TD research:
tokendaily.co/blog/the-next-…
But for now, keep reading this thread 🙂 2/ So far, all crypto unicorns are either exchanges or mining hardware companies. While I expect these sectors to continue growing, the blockchain data sector is the red-hot thing right now.

One of the cool features I like about @grinMW is the file coin transfer. It may feel weird as it is less convenient than a direct transfer, however, it is more materialistic and is definitely easier to grasp for non-techies as it resembles cash. It works by sending the tx (money) as a file, the recipient processes the file and generates a response (receipt). The sender receives the receipt and finalizes the TX. This way, it is much harder to get the tx wrong making it more intuitive to mainstream users.