Category Archives: Smart Contracts
Your Ultimate Guide To Zero-knowledge Roll Ups And Top 10 Ways How They Are Integral To Smart Contracts – Blockchain Magazine
January 29, 2024 by Diana Ambolis
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Zero-knowledge roll-ups (ZK rollups) are a revolutionary concept in the blockchain space, addressing scalability and privacy concerns associated with decentralized systems. In simple terms, Zero-knowledge rollups enable the execution of smart contracts off-chain while providing a cryptographic proof (zero-knowledge proof) on-chain to validate the correctness of the computations. This technique significantly reduces the computational load
Zero-knowledge roll-ups (ZK rollups) are a revolutionary concept in the blockchain space, addressing scalability and privacy concerns associated with decentralized systems. In simple terms, Zero-knowledge rollups enable the execution of smart contracts off-chain while providing a cryptographic proof (zero-knowledge proof) on-chain to validate the correctness of the computations. This technique significantly reduces the computational load on the blockchain, enhancing scalability.
At the core of Zero-knowledge rollups is the idea of bundling numerous transactions off-chain and submitting only a succinct proof to the main blockchain. This proof, known as a zero-knowledge proof, assures the network that the computations performed off-chain are valid without revealing any specific details about the transactions. The term zero-knowledge emphasizes that the proof doesnt disclose the underlying information, ensuring the privacy of the involved parties.
Zero-knowledge rollups come in two main types: optimistic rollups and zk-SNARK-based rollups. Optimistic rollups rely on fraud proofs, allowing users to submit evidence if they detect any malicious activity. On the other hand, zk-SNARK-based rollups utilize zero-knowledge succinct non-interactive arguments of knowledge, enabling more efficient and compact proofs without relying on fraud proofs.
One of the primary advantages of ZK rollups is their ability to significantly increase the throughput of blockchain networks. By moving the bulk of transaction processing off-chain, the main blockchain is relieved from processing the computational load of smart contracts, resulting in faster transaction confirmation times and lower fees.
Moreover, ZK rollups enhance privacy by only revealing essential information on-chain. The zero-knowledge proofs ensure that sensitive transaction details remain confidential, making them an attractive solution for applications where privacy is a critical concern.
Despite these advantages, challenges remain, such as the complexity of implementing zero-knowledge proofs and potential trade-offs in terms of computational requirements. However, ongoing research and development efforts aim to overcome these hurdles, paving the way for widespread adoption of ZK rollups across various blockchain ecosystems.
In conclusion, zero-knowledge rollups represent a groundbreaking solution for the scalability and privacy issues plaguing decentralized systems. By leveraging cryptographic techniques to provide efficient proofs of off-chain computations, ZK rollups offer a promising path toward a more scalable and private blockchain future.
Also, read- What Makes These Top 5 Blockchain Networks Different?
Zero-knowledge rollups play a crucial role in enhancing the capabilities and efficiency of smart contracts in various ways. Here are the top 10 ways zero-knowledge rollups are integral to smart contracts:
Zero Knowledge Rollups (ZK Rollups) hold significant importance in the realm of blockchain technology, particularly in addressing key challenges associated with scalability, privacy, and efficiency. Here are several reasons highlighting the importance of ZK Rollups:
In conclusion, Zero-Knowledge Rollups (ZK Rollups) emerge as a pivotal advancement in blockchain technology, offering transformative solutions to critical challenges faced by decentralized networks. The importance of ZK Rollups lies in their ability to enhance scalability, privacy, and efficiency, thereby paving the way for a more robust and widely adopted blockchain ecosystem.
ZK Rollups directly address the scalability bottleneck by offloading the majority of computations off-chain, resulting in faster transaction processing and reduced congestion on the main blockchain. This not only improves the overall throughput but also makes blockchain networks more capable of handling a growing number of transactions.
Privacy preservation is another key facet of ZK Rollups. Leveraging zero-knowledge proofs, these solutions ensure confidential transactions by validating their correctness without revealing sensitive details. This feature is crucial for applications where user privacy and data confidentiality are paramount, such as in financial transactions or personal information exchange.
The user experience in decentralized applications (DApps) and smart contracts is significantly enhanced by ZK Rollups. Faster confirmation times, reduced transaction costs, and improved privacy contribute to a more seamless and user-friendly interaction with blockchain technology, fostering broader adoption.
Furthermore, ZK Rollups play a pivotal role in facilitating cross-chain interoperability. By securely transferring assets and information between different blockchains using zero-knowledge proofs, ZK Rollups contribute to a more interconnected and collaborative blockchain ecosystem.
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Top 10 Ways Of Making Ethereum Layer 2 Solutions Surprisingly Cost Effective – Blockchain Magazine
January 29, 2024 by Diana Ambolis
91
Ethereum Layer 2 solutions are critical components designed to address the scalability challenges of the Ethereum blockchain. As Ethereums popularity has grown, its limitations, such as high gas fees and slower transaction processing times, have become apparent. Layer 2 solutions aim to mitigate these issues by moving some of the computation and transaction processing off
Ethereum Layer 2 solutions are critical components designed to address the scalability challenges of the Ethereum blockchain. As Ethereums popularity has grown, its limitations, such as high gas fees and slower transaction processing times, have become apparent. Layer 2 solutions aim to mitigate these issues by moving some of the computation and transaction processing off the Ethereum mainnet, offering a more efficient and cost-effective environment.
One prominent type of Layer 2 solution is Optimistic Rollups. Optimistic Rollups operate on the premise of optimistic execution, meaning transactions are initially processed off-chain, and a cryptographic proof is submitted to the Ethereum mainnet only in the event of a dispute. This approach significantly reduces the gas fees and congestion on the Ethereum mainnet, allowing for faster and cheaper transactions.
Another notable category of Layer 2 solutions involves Zero-Knowledge Rollups. These solutions utilize advanced cryptographic techniques, like zero-knowledge proofs, to execute smart contracts off-chain while providing succinct proofs on-chain to validate the accuracy of the computations. Zero-Knowledge Rollups not only enhance scalability but also improve privacy by keeping sensitive transaction details confidential.
Ethereum Layer 2 solutions offer several advantages. Firstly, they dramatically reduce transaction costs, making decentralized applications (DApps) more accessible to users. This is particularly crucial for enabling microtransactions and fostering broader adoption. Secondly, these solutions significantly enhance transaction throughput, ensuring that the Ethereum network can handle a higher volume of transactions per second, addressing one of the primary scalability concerns.
Moreover, Layer 2 solutions contribute to a more sustainable and eco-friendly blockchain ecosystem. By offloading computational work to Layer 2 networks, the energy consumption associated with Ethereum transactions is reduced, aligning with the broader industry trend toward more environmentally friendly blockchain solutions.
Despite their advantages, Ethereum Layer 2 solutions also face challenges. The need for seamless integration with existing smart contracts and the potential centralization of certain implementations are among the issues that developers and the Ethereum community are actively working to address.
In conclusion, Ethereum Layer 2 solutions play a crucial role in addressing the scalability limitations of the Ethereum blockchain. By leveraging techniques like Optimistic Rollups and Zero-Knowledge Rollups, these solutions reduce transaction costs, improve throughput, and contribute to the sustainability of decentralized applications on the Ethereum network. As the Ethereum ecosystem evolves, Layer 2 solutions are poised to be instrumental in shaping the future of decentralized finance, NFTs, and various other blockchain-based applications.
Also, read- Your Ultimate Guide To The Cross Chain AI Hub With Ethereum
Ethereum Layer 2 solutions are off-chain scaling mechanisms designed to alleviate the scalability and high transaction fee issues on the Ethereum blockchain. These solutions aim to increase transaction throughput by moving some processing off the main Ethereum network while still maintaining the security and decentralization features. Here are some notable Ethereum Layer 2 solutions:
Making Ethereum Layer 2 solutions cost-effective is essential for encouraging widespread adoption and ensuring a sustainable blockchain ecosystem. Here are ten strategies to enhance the cost-effectiveness of Layer 2 solutions on Ethereum:
Ethereum Layer 2 solutions offer a range of benefits that address some of the key challenges faced by the Ethereum blockchain. Here are several advantages of implementing Layer 2 solutions:
In conclusion, Ethereum Layer 2 solutions represent a transformative step forward for the Ethereum blockchain, addressing critical challenges and unlocking new possibilities for decentralized applications (DApps) and users. The benefits of Layer 2 solutions are multifaceted, with a significant impact on scalability, transaction costs, confirmation times, and overall user experience.
The scalability improvement achieved by Layer 2 solutions is fundamental for the continued growth of the Ethereum network. By efficiently offloading a substantial portion of transaction processing and computations to Layer 2, these solutions mitigate congestion on the Ethereum mainnet, enabling it to handle a higher volume of transactions simultaneously.
The reduction in transaction costs is a key advantage that makes blockchain technology more accessible and economically viable for a broader user base. Layer 2 solutions contribute to lower fees, particularly beneficial for microtransactions and everyday transactions, fostering greater adoption and utility of decentralized applications.
Faster transaction confirmation times are a hallmark of Layer 2 solutions. Users can experience quicker interactions with DApps, contributing to a more responsive and user-friendly environment. This speed is particularly crucial for applications such as decentralized exchanges and payments.
Privacy enhancements, such as those provided by zero-knowledge rollups, contribute to the confidentiality of transactions. This is pivotal for applications where user privacy is paramount, addressing concerns related to the exposure of sensitive transaction details on the blockchain.
The energy efficiency brought about by Layer 2 solutions aligns with the broader industry trend towards sustainability. By reducing the computational load on the Ethereum mainnet, Layer 2 solutions contribute to a more environmentally friendly blockchain ecosystem.
Economic incentives introduced by Layer 2 solutions, such as lower fees and token rewards, play a role in driving user engagement and adoption. These incentives create a positive feedback loop, encouraging more users to participate in the off-chain scaling solution.
The support for diverse use cases showcases the versatility of Layer 2 solutions. From decentralized finance (DeFi) and non-fungible tokens (NFTs) to gaming and beyond, these solutions broaden the applicability of blockchain technology across various industries.
In essence, Ethereum Layer 2 solutions not only address the immediate challenges faced by the Ethereum network but also lay the foundation for a more scalable, efficient, and inclusive blockchain ecosystem. As the technology continues to evolve, Layer 2 solutions play a pivotal role in shaping the future of decentralized applications and contributing to the widespread adoption of blockchain technology.
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Top 10 Ways Of Making Ethereum Layer 2 Solutions Surprisingly Cost Effective - Blockchain Magazine
Metadata in Blockchain: What Is It and How it Works? – Crypto Times
The dynamic realm of blockchain is continually expanding and tons of newer applications are introduced on top of it regularly. As the adoption of blockchain technology is going through a major paradigm shift, its utility is extending beyond just transferring cryptocurrency assets from one address to another.
Blockchain provides magnificent data storing facilities with numerous functionalities and metadata is one of them. This feature has an important role in enhancing adaptability, efficiency, and accessory for blockchain transactions.
Metadata is the additional information attached to blockchain transactions. It contains comprehensive details of a transaction such as timestamp, sender/receiver, gas fee, or any textual content. As the transactions on the blockchain are irreversible, the metadata is added to give it context for references.
While the primary function of a blockchain is to perform transactions, metadata enables those transactions to have an identity or referential sub-content. This feature essentially improves the functionality further than just the transfer of crypto assets.
Metadata could be also described as Data for Data as it provides extra details regarding the data or assets being transferred.
Metadata is mainly of two types:
On-chain metadata is directly stored on the blockchain as a part of transactions. It includes information such as transaction labels, remarks, and references or links to other contracts. This information can be seen and accessed by anyone as it is stored on the blockchain.
Off-chain metadata is added to the transaction but it is not directly stored on the blockchain. Such data is mentioned in the transaction via links or outgoing references, leading to other documents, filings, or sources available on the Internet.
While on-chain metadata is included in the blockspace, off-chain metadata remains non-subjective to the transaction processing hence it is used in need of elaborative metadata.
Most of the on-chain metadata is associated with transactions such as transaction properties and smart contract code. This data is an integral part of the blockchains data structure, and it is permanently stored across all the copies of the blockchain that nodes download.
All blockchain transactions have some elementary metadata, which contains basic details such as sender and receiver address, transferred asset amount, and timestamp. Like transactions, the smart contract code and its associated data, including functions and variables, are also stored as on-chain metadata in the blockchain.
All these on-chain data are accessible through blocks for verification, which can be found via block headers. On the other hand, off-chain metadata is not primarily stored on the blockchain.
The intent behind doing so is that sometimes metadata consists of larger files or content that may increase the size of a transaction. This kind of metadata is stored on external storage sources like IPFS, which provides an ideal decentralized data storage option.
Metadata is added to blockchain transactions using smart contracts. Besides elementary metadata, which is automatically generated while the transaction is executed, external metadata can be added using this method.
Although it requires users to have some coding experience as it needs to be inserted within the smart contract code. To do so, a smart contract first needs to be created. Below is a Solidity smart contract code block that shows how metadata is added manually.
In the example, adding metadata involves creating a string variable inside the contract. We have created a smart contract, CryptoTimes, and defined a variable using string data type. String variables can be assigned with any value in text format, including numbers, messages, links, etc.
The user will need to provide metadata as input when this contract is executed. Before sending the transaction, the sender will have to communicate with this contract. It can be done by using existing libraries such as web3.js and ethers.js.
Some Ethereum wallet also allows adding metadata while sending transactions which does not require such coding.
Blockchain metadata can be used for a wide range of applications. Every project using blockchain in its infrastructure can benefit from Metadata. Below are the applications where blockchain metadata can be used;
The application of non-fungible tokens (NFTs) is one of the most beneficial with Metadata as it stores the creators name, previous owners, characteristics, and more. All this information is critical for any digital collectibles or NFTs.
Several digital assets deployed on blockchain contain unique details stored using Metadata. It can help authenticate a crypto asset while also enabling it to have specified values.
Metadata is one of the most important elements of a smart contract. As these contracts are self-executing, Metadata can provide conditional information to enforce the transactions on the blockchain.
The blockchain-based supply chain ecosystem can utilize Metadata to improve product traceability and transparency. It can also provide details on product authenticity and additional details about goods or services.
Metadata enables efficient data recording and managing processes as it could add labels to data records. This allows simplified data access as metadata properties allow one to sort or find specific records from large data structures.
Metadata can also be used in digital identity management as it makes it possible to enter personalized credentials and information for user directories. Groups, organizations, or even governments can benefit from this application while inheriting the security of blockchain technology.
Also Read : Real-World Use Cases of Blockchain Technology
While metadata enables additional functionality, it also needs to be noted that metadata requires block space to be stored on the blockchain. The higher the size of metadata, the more space it needs. It could also require more gas fees associated with the transaction as the size of the transaction will also increase.
In the coming time, blockchain metadata could potentially become an essential functionality as this technology is rapidly shifting toward retail applications. It can also become an epicenter for developing newer applications that inherit immutability, security, and several other maneuvering characteristics of blockchain technology.
Ans. Onchain metadata refers to the elementary data, such as transaction sender/receiver details and timestamps, while offchain metadata includes links or references to external information.
Ans. Blockchain metadata can not be deleted as it is stored on the blockchain. The blockchains features of immutability and irreversibility do not allow the deletion of metadata.
Ans. Metadata is inserted in the transaction using a smart contract, and it is permanently stored on the blockchain after the transaction is broadcast.
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Metadata in Blockchain: What Is It and How it Works? - Crypto Times
Arbitrum Close to All-Time High in ETH Held in Its Smart Contracts – Unchained – Unchained
The rollup holds about 4.5 million ETH in its smart contracts, a 13% increase in the past 30 days and a 104% jump in the past year.
Arbitrum has attracted the most ETH among all blockchains.
(Shutterstock)
Posted January 26, 2024 at 2:19 pm EST.
Arbitrum, the leading rollup scaling solution for the Ethereum blockchain, is close to its all-time high for the amount of ETH held in its smart contracts.
Arbitrum has made a lot more progress in decentralizing/securing their L2, Paul Vaden, a core contributor at derivatives trading platform Lyra, wrote to Unchained on Telegram. So, for people who want to move to a safe battle-tested L2, Arbitrum is the obvious choice.
Users bridge their ether to Arbitrum for a variety of reasons. For example, users may want to trade on protocols based only on Arbitrum such as GMX, transact with lower costs compared to Ethereum, or experiment with Arbitrums technology stack.
The number of ETH in Arbitrum compared to other layer 2 blockchains. (Growthepie)
Arbitrum holds nearly 4.5 million ETH in its smart contracts, a 13% increase in the past 30 days and a 104% jump in the past year. Optimism, Base, zkSync Era, and Lineas combined amount of ETH is less than Arbitrums figure, data from layer 2 analytics website growthepie.xyz shows.
Read more: Arbitrum Commands Nearly Half of Total Market Share in Ethereum Rollups: Nansen
Arbitrum reached an all-time high of more than 4.5 million ETH in its smart contracts roughly three weeks ago on January 5.
Rollups, considered scaling solutions for Ethereum, aim to optimize transaction speed and cost efficiency for users by moving computation off-chain and bundling a collection of transactions before posting them to Ethereums base layer.
The main Arbitrum bridge currently holds more than 1.4 million ETH, making it the sixth-largest holder of ETH, behind Ethereums staking deposit contract, the smart contract for wrapped ETH, one Binance wallet, one Kraken address, and Robinhood.
The main Arbitrum bridge has seen consistent growth in its ETH balance. (Etherscan)
The number of ETH in this Arbitrum bridge has more than doubled in roughly the past five months from about 700,000 in Sept. 2022, data from blockchain explorer Etherscan shows, highlighting how people have been increasingly moving their ETH from Ethereums base layer to Arbitrums layer 2.
Disclosure: Arbitrum is a sponsor for Unchained.
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Arbitrum Close to All-Time High in ETH Held in Its Smart Contracts - Unchained - Unchained
Cardano Smart Contracts Record Massive 67% Growth in 2024 Even as ADA Whale Transactions Dwindle – ZyCrypto
Cardano, positioning itself as a strong contender against established platforms like Ethereum, is experiencing remarkable growth in smart contract deployment.
Recent data from Cardano Blockchain Insights reveals a surge in V1 and V2 Plutus smart contracts, reaching an impressive 24,050 as of January 24. This marks a significant 67% increase from the 14,379 contracts recorded at the start of the year.
This surge in smart contracts aligns with Cardanos expansion in 2023, during which nearly 10,000 contracts were added. It reflects the platforms ongoing commitment to development and innovation.
The increase in smart contracts coincides with strategic efforts by the Plutus Core language development team. The execution of common subexpression elimination (CSE) for Untyped Plutus Core has resulted in substantial improvements. Plutus Core, acting as the programming language connecting smart contracts with Cardanos settlement layer, has witnessed enhanced efficiency.
Parallelly, Cardanos development landscape shows promise. Input Output Global (IOG) reports 157 launched projects and 1,319 projects actively under development as of the week ending January 19. The platform also saw key releases in 2024, including Marlowe, the first Hydra release of the year, and an upgrade to the Lace wallet.
On the other hand, Cardanos blockchain is experiencing an extraordinary reduction in large transaction volumes commonly associated with significant whale movements.
This abrupt and substantial drop has resulted in a near-halt in the networks usual activity. On-chain metrics are pointing towards a striking decline in the number of large transactions, a behaviour typically linked to whale activity. Such a drastic decrease often signals a shift in the network dynamics, but in this instance, the underlying reasons remain unclear.
The on-chain metrics, vital indicators of blockchain activity, reveal an unusual quietness in large transactions. These transactions, often representative of whale behaviour, have seen an unexpected and steep decline. The significance of such a decline is usually magnified as it hints at potential alterations in the networks usual flow.
However, despite these positive developments, the price of ADA, Cardanos native cryptocurrency, is significantly influenced by the broader market trends. As of the latest update, ADA is valued at $0.48, showing daily gains of approximately 3.32%. On a weekly chart, the token has experienced a 10% decline.
The current trading pattern indicates that ADA faces support at the $0.45 level, while $0.50 remains a critical resistance zone for the cryptocurrency. Investors and enthusiasts are closely watching how these developments in smart contracts and network enhancements will impact ADAs position in the market.
As Cardano continues strengthening its position through increased smart contract deployment and network enhancements, investors and industry observers are eager to see how these developments will shape ADAs standing in the market.
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4 Challenges and Solutions in Auditing Smart Contracts – Block Telegraph
Auditors are navigating the complex landscape of smart contracts with unique challenges that demand innovative solutions. From enhancing smart contract security to employing AI-powered auditing for ensuring contract integrity, weve compiled insights from a Head of Business Strategy and a co-founder. Discover the four key challenges and the cutting-edge methods being used to address them.
One significant challenge auditors face when evaluating smart contracts is ensuring their security and accuracy. Smart contracts, being self-executing and based on blockchain technology, can contain complex code thats difficult to audit.
To address this, theres a growing reliance on specialized auditing tools and frameworks designed to systematically analyze and verify smart-contract code, enhancing its integrity and trustworthiness. This approach helps in identifying vulnerabilities and ensuring that the contract operates as intended.
One key challenge auditors face when evaluating smart contracts is understanding the complex code and logic that govern these contracts. This complexity can obscure vulnerabilities or unintended behaviors.
To address this, auditors are increasingly leveraging automated tools and specialized software that can analyze smart contract code more thoroughly. Additionally, theres a growing emphasis on education and training for auditors in blockchain technology and programming languages like Solidity to ensure they can effectively review and verify smart contract integrity.
It is essential to note that one of the biggest issues when assessing smart contracts is addressing inherent vulnerabilities. When they are on a blockchain, these contracts cannot be changed because of their immutable nature.
Therefore, security before deployment is very important. This means that there must be a method for auditors to conduct comprehensive assessments through combined methods using automated tools and manual reviews to identify and fix any malfunctions. Another level of complexity exists due to inconsistency in developing smart contracts, which can expose systems to risks.
Consequently, this has led to standard-setting and best practice development in the field of smart contracts by industry players. Apart from enhancing uniformity, this approach also ensures the general safety and dependability of these contractual agreements. Auditors have to work closely with developers to prevent errors and ensure secure coding standards are followed during testing and debugging to guarantee the functionality and integrity of smart contracts.
Auditors face challenges in comprehensively evaluating smart contracts.
One way to address this is by leveraging artificial intelligence and machine learning algorithms. AI-powered tools can automatically identify vulnerabilities, detect complex logic flaws, and enhance the auditing process. For example, AI can analyze contract code to identify potential security vulnerabilities, such as reentrancy attacks or unchecked external calls.
It can also help auditors understand complex logic by providing insights into the contracts functionality. Through real-time feedback and automated analysis, AI and ML assist auditors in ensuring contract integrity.
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4 Challenges and Solutions in Auditing Smart Contracts - Block Telegraph
Cardano smart contracts skyrocket by almost 10,000 in 2024 – Finbold – Finance in Bold
The Cardano (ADA) network continues to experience growth in the deployment of smart contracts on its blockchain, a significant factor driving the platform towards its goal of competing with established entities like Ethereum (ETH).
As of January 24, the cumulative number of V1 and V2 Plutus smart contracts on Cardano reached 24,050. This figure reflects a 9,671 or 67% growth from January 1, 2024, with a count of 14,379, according to data retrieved from Cardano Blockchain Insights.
Notably, the growth in smart contracts builds upon the 2023 expansion, where the platform added almost 10,000 contracts in alignment with increased development activity.
The surge in smart contracts also coincides with a previous report indicating that the team working on the Plutus Core language executed common subexpression elimination (CSE) for Untyped Plutus Core.
Following this implementation, the platform has experienced notable improvements, with moderate and significant enhancements observed in the costs and sizes of most scripts. It is crucial to highlight that Plutus Core serves as the programming language bridging the gap between smart contracts and the ultimate settlement layer of the Cardano blockchain.
In line with increased network development, data from Cardano builder Input Output Global (IOG) revealed that 157 projects were launched, with 1,319 projects actively being developed on Cardano as of the week ending January 19.
At the same time, since the start of 2024, Cardano has witnessed several releases, including Marlowe and the first Hydra release of the year, along with an upgrade to the Lace wallet.
Despite the increased network development activity, the price of ADA is significantly tied to the general market trajectory. By press time, ADA was valued at $0.47, showing daily gains of about 0.6%, while on the weekly chart, the token is down by 10%.
Based on the current trading pattern, ADA is facing support at the $0.45 level, while $0.50 remains the key resistance zone.
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Cardano smart contracts skyrocket by almost 10,000 in 2024 - Finbold - Finance in Bold
Analyst: DeeStream could overtake Chainlink and Polygon in 2024 – crypto.news
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Chainlink (LINK) and Polygon (MATIC) are popular projects. Chainlink is an Oracle network that facilitates smart contracts using data from off-chain sources. On the other hand, Polygon allows developers to deploy dapps.
Even so, analysts appear to be closely monitoring DeeStream (DST), believing the project might trend higher in 2024.
Chainlink is trading at around $14.1, up nearly 3% in the past day.
Some analysts expect the token to reach $15.
Even so, the uptrend momentum might not last.
Polygon prices remain under pressure.
Still, the recovery to $0.7483 when writing is encouraging.
Analysts expect the token to slowly print higher highs in the sessions ahead.
Analysts predict that the decentralized live-streaming platform DeeStream will likely outperform Chainlink and Polygon this year.
Several reasons support this prediction.
DeeStreamhas a low price and a high supply; a net positive for prices. Moreover, DST holders receive benefits such as revenue sharing and voting rights.
DeeStream streamers can receive instant payouts, and viewers can save money due to lower fees.
These advantages make it a worthy alternative to platforms like YouTube Live and Twitch.
DST is available for $0.035 in the ongoing presale.
Disclosure: This content is provided by a third party. crypto.news does not endorse any product mentioned on this page. Users must do their own research before taking any actions related to the company.
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Analyst: DeeStream could overtake Chainlink and Polygon in 2024 - crypto.news
Demystifying Decentralized Finance (DeFi) | by LuisVincent | Jan, 2024 – Medium
Decentralized Finance (DeFi) has emerged as one of the hottest topics in the world of technology and finance. Leveraging blockchain technology, DeFi aims to revolutionize traditional financial services by providing open, permissionless, and transparent alternatives. In this comprehensive guide, we will explore the fundamentals of DeFi, its key components, use cases, risks, and opportunities. Whether youre a novice or an experienced blockchain enthusiast, this guide will provide valuable insights into the future of finance.
Decentralized Finance (DeFi) refers to a broad category of financial services and applications built on blockchain networks. Unlike traditional finance, DeFi aims to eliminate intermediaries, enhance transparency, and provide greater accessibility to financial services for everyone.
Explore the core principles that underpin DeFi, including decentralization, transparency, interoperability, and composability. Understand how these principles differentiate DeFi from traditional finance and contribute to its disruptive potential.
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. Discover how smart contracts power various DeFi applications, enabling automated and trustless transactions.
Decentralized exchanges facilitate peer-to-peer trading of digital assets without the need for intermediaries. Learn about the different types of DEXs, their advantages over centralized exchanges, and popular DEX platforms.
DeFi enables individuals to borrow and lend digital assets directly with one another, bypassing traditional financial institutions. Explore decentralized lending protocols, such as
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Demystifying Decentralized Finance (DeFi) | by LuisVincent | Jan, 2024 - Medium
Stolen Crypto Falls in 2023, but Hacking Remains a Threat – Chainalysis Blog
Over the last few years, cryptocurrency hacking has become a pervasive and formidable threat, leading to billions of dollars stolen from crypto platforms and exposing vulnerabilities across the ecosystem. As we revealed in last years Crypto Crime Report, 2022 was the biggest year ever for crypto theft with $3.7 billion stolen. In 2023, however, funds stolen decreased by approximately 54.3% to $1.7 billion, though the number of individual hacking incidents actually grew, from 219 in 2022 to 231 in 2023.
Why the huge drop in stolen funds? Mostly due to a drop in DeFi hacking. Hacks of DeFi protocols largely drove the huge increase in stolen crypto that we saw in 2021 and 2022, with cybercriminals stealing more than $3.1 billion in DeFi hacks in 2022. But in 2023, hackers stole just $1.1 billion from DeFi protocols. This amounts to a 63.7% drop in the total value stolen from DeFi platforms year-over-year. There was also a significant drop in the share of all funds stolen accounted for by DeFi protocol victims in 2023, as we see on the chart below.
Well explore the possible reasons for the drop in DeFi hacking in greater detail later on. Despite that drop, there still were several large hacks of notable DeFi protocols throughout 2023. In March, for instance, Euler Finance, a borrowing and lending protocol on Ethereum, experienced a flash loan attack, leading to roughly $197 million in losses. July 2023 saw 33 hacks the most of any month which included $73.5 million stolen from Curve Finance. We can see the spikes driven by those hacks below.
Similarly, several large exploits occurred in September and November 2023 on both DeFi and CeFi platforms: Mixin Network ($200 million), CoinEx ($43 million), Poloniex Exchange ($130 million), HTX ($113.3 million), and Kyber Network ($54.7 million).
Keep reading to learn more about crypto hacking trends in 2023, including how North Korea-affiliated cyber criminals had one of their most active years, executing more individual crypto hacks than ever before.
DeFi hacking exploded in 2021 and 2022, with attackers stealing approximately $2.5 billion and $3.1 billion, respectively, from protocols. Mar Gimenez-Aguilar, Lead Security Architect and Researcher at our partner Halborn, a security company specializing in web3 and blockchain solutions, told us more about the rise in DeFi hacking during those years. Theres been a worrying trend in the escalation of both the frequency and severity of attacks within the DeFi ecosystem, she explained. In our comprehensive analysis of the top 50 DeFi hacks, we observed that EVM-based chains and Solana are among the most targeted chains, largely due to their popularity and capability to execute smart contracts. When examining this trend last year, security experts told us that they believe many DeFi vulnerabilities stemmed from protocol operators focusing primarily on growth, and not enough on implementing and maintaining robust security systems.
However, for the first time since DeFis emergence as a key sector of the crypto economy, the yearly total stolen from DeFi protocols fell and fell significantly.
The value lost in DeFi hacks declined by 63.7% year-over-year in 2023, and median loss per DeFi hack dropped by 7.4%. And, while the number of individual crypto hacks rose in 2023, the number of DeFi hacks specifically declined by 17.2%.
In order to understand this trend better, we worked with Halborn to analyze 2023 DeFi hacking activity through the lens of the specific attack vectors hackers utilized.
Attack vectors affecting DeFi are diverse and constantly evolving; it is therefore important to classify them to understand how hacks occur and how protocols might be able to reduce their likelihood in the future. According to Halborn, DeFi attack vectors can be placed into one of two categories: vectors originating on-chain and vectors originating off-chain.
On-chain attack vectors stem not from vulnerabilities inherent to blockchains themselves, but rather from vulnerabilities in the on-chain components of a DeFi protocol, such as their smart contracts. These arent a point of concern for centralized services, as centralized services dont function as decentralized apps with publicly visible code the way DeFi protocols do. Off-chain attack vectors stem from vulnerabilities outside of the blockchain one example could be the off-chain storage of private keys in, say, a faulty cloud storage solution and therefore apply to both DeFi protocols and centralized services.
Source: Halborn
According to Gimenez-Aguilar, both on-chain and off-chain vulnerabilities present serious concerns. Historically, the majority of DeFi hacks have stemmed from vulnerabilities in smart contract design and implementation a large proportion of the affected contracts we examined had either not undergone any audit or had been audited inadequately, she said, explaining on-chain vulnerabilities. Another notable trend is the increase in attacks as a result of compromised private keys, which underscores the importance of improvements in security practices outside of a given blockchain.
Indeed, the data shows that both the on-chain and off-chain vulnerabilities Gimenez-Aguilar describes in particular the compromise of private keys, price manipulation hacks, and smart contract exploitation drove hacking losses in 2023.
Source: Halborn
Overall, on-chain vulnerabilities drove the majority of DeFi hacking activity in 2023, but as we see on the chart below, that changed over the course of the year, with compromised private keys driving a larger share of hacks in the third and fourth quarters.
Source: Halborn
On a hack-by-hack basis, hacks stemming from contagion (on-chain) were the most destructive, with a median loss of $1.4 million. Governance attacks (on-chain), insider attacks (off-chain), and compromised private keys (off-chain) follow, with all three accounting for a median hack value of roughly $1 million.
Source: Halborn
Overall though, the data provides reasons for optimism. Both the drop in raw value stolen from DeFi, and the relative decline in on-chain vulnerability-driven hacking over the course of 2023 suggests that DeFi operators may be getting better at smart contract security. I do think that the increase of security measures in DeFi protocols is a key factor in the reduction in the quantity of hacks related to smart contracts vulnerabilities. If we compare the top 50 hacks by value lost from this year with those from previous ones (studied in Halborns Top 50 hacks report), there is a reduction in percentage of losses from 47.0% of the total to 18.2%. Price manipulation attacks, nevertheless, remain almost constant with around 20.0% of the total value lost. This is an indication that, when performing an audit, protocols should also take into account how they interact with the whole DeFi ecosystem, said Gimenez-Aguilar. However, she also stressed that the growth in hacks driven by attack vectors such as compromised private keys indicates that DeFi operators must move beyond smart contract security and address off-chain vulnerabilities as well: Doing the same comparison as before, losses related to compromised private keys increased from 22.0% to 47.8%. As we see above, both on-chain and off-chain vulnerabilities can be highly destructive.
However, Gimenez-Aguilar also acknowledged that the drop in DeFi hacking losses may be driven in part by the overall drop in DeFi activity in 2023, which may have simply decreased the number of DeFi protocols that made ripe targets for hackers. Total value locked (TVL), which measures the total value held or staked in DeFi protocols, was down for all of 2023, following a sharp decrease in the middle of 2022.
Source: DeFiLlama
We cant say for sure whether the drop in DeFi hacking was driven primarily by better security practices or the drop in DeFi activity overall most likely, it was a mix of the two. But, if the decrease in hacking was primarily driven by the drop in overall activity, then it would be important to watch whether DeFi hacking rises again in tandem with another DeFi bull market, as this would lead to higher TVL and therefore a larger pool of DeFi funds for hackers to target.
Regardless, there are steps DeFi operators should take to improve security. DeFi protocols vulnerable to on-chain failures can develop systems that monitor on-chain activity related to economic risks and prior platform losses. Companies such as Hypernative and Hexagate, for example, produce customized alerts to prevent and react to cyber attacks, which can help platforms better secure integrations with third parties such as bridges, and communicate with customers who might be at risk. Platforms vulnerable to off-chain failures may aim to reduce reliance on centralized products and services.
North Korea-linked hacks have been on the rise over the past few years, with cyber-espionage groups such as Kimsuky and Lazarus Group utilizing various malicious tactics to acquire large amounts of crypto assets. In 2022, cryptocurrency stolen by hackers associated with North Korea reached its highest level of approximately $1.7 billion. In 2023, we estimate that the total amount stolen is slightly over $1.0 billion, but as we see below, the number of hacks rose to 20 the highest number on record.
We estimate that North Korea-linked hackers stole approximately $428.8 million from DeFi platforms in 2023, and also targeted centralized services ($150.0 million stolen), exchanges ($330.9 million), and wallet providers ($127.0 million).
2023 saw a notable decrease in North Korean targeting of DeFi protocols, mirroring the overall drop in DeFi hacking that we discussed above.
In June 2023, thousands of users of Atomic Wallet, a non-custodial cryptocurrency wallet service, were targeted by a hacker, leading to estimated losses of $129 million. The FBI later attributed this attack to North Korea-affiliated hacking group TraderTraitor and stated that the Atomic Wallet exploit was the first in a series of similar attacks, including the Alphapo and Coinspaid exploits later in the month. Although the specifics of how the attack occurred remain unclear, we used on-chain analysis to look at what happened to the funds after the initial attack, which weve broken down into four phases.
In the first phase, the attacker chain hopped moving assets from one blockchain to another, typically to obfuscate the flow of ill-gotten funds to the Bitcoin blockchain via the following three methods:
The Chainalysis Reactor graph below illustrates the third method whereby the stolen funds (in Ether at the time) moved through several intermediary addresses before reaching the Avalanche Bridge and converting to Bitcoin.
In the second phase, the attacker sent the stolen funds to the OFAC-sanctioned Sinbad, a mixing service that obscures on-chain transaction details and has been previously used by North Korean money launderers. Then, the attacker withdrew the funds from Sinbad and moved them to consolidation addresses on Bitcoin.
In the third phase, the attackers money laundering strategy shifted to focusing almost exclusively on the Tron blockchain rather than the Bitcoin blockchain. The attacker chain hopped to the Tron blockchain via one of the following methods:
In the fourth and final phase, the attacker deposited the funds at various services on the Tron blockchain. Some of these funds were mixed via Trons JustWrapper Shielded Pool, whereas others were ultimately sent to high-activity Tron addresses suspected of belonging to over-the-counter traders.
Additional on-chain activity revealed that funds stolen from Atomic were consolidated with assets from other sources before moving elsewhere, which is likely related to the subsequent Alphapo and Coinspaid exploits.
Although the total amount stolen from crypto platforms in 2023 was down significantly from prior years, it is clear that attackers are becoming increasingly sophisticated and diverse in their exploits. The good news is, crypto platforms are becoming more sophisticated in their security and responses to attacks, too.
When crypto platforms act promptly after exploits, law enforcement agencies will be better equipped to contact exchanges where frozen funds are located to initiate seizure and contact services through which the funds flowed to gather relevant information about accounts and users. Over time, as these processes improve, it is likely that funds stolen from crypto hacks will continue to decline.
This material is for informational purposes only, and is not intended to provide legal, tax, financial, investment, regulatory or other professional advice, nor is it to be relied upon as a professional opinion. Recipients should consult their own advisors before making these types of decisions. Chainalysis does not guarantee or warrant the accuracy, completeness, timeliness, suitability or validity of the information herein. Chainalysis has no responsibility or liability for any decision made or any other acts or omissions in connection with Recipients use of this material.
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Stolen Crypto Falls in 2023, but Hacking Remains a Threat - Chainalysis Blog