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Last weeks SEC approval for listing and trading of a number of spot bitcoin exchange-traded product (ETP) shares was big news. The next shoe to drop could be the SECs approval of a bunch of ether spot ETPs. Gary Genslers statement said Importantly, todays Commission action is cabined to ETPs holding one non-security commodity, bitcoin. It should in no way signal the Commissions willingness to approve listing standards for crypto asset securities. Which, of course clarified, in lawyerly terms, what the limitations of the approval were. No ether spot ETPs were authorized in this cabined action. We have been down this path before. Nine ether futures ETFs were granted approvals back in September 2023. Legal action against the SEC forced their hand into granting spot bitcoin ETF approval. Bitcoin futures ETFs were already granted approval, two years ago. The same could happen for a spot ether ETF. CNBCs Squawk Box interview with Larry Fink of BlackRock, reveals that he favors an ether spot ETF.

EthereumETH, which uses ether as its native currency, has been the site of many major innovations in blockchain based finance. Even the SEC, in a notice from 2023, lists the achievements of the Ethereum ecosystem in the background section. Ethereum has a large base of committed developers. The main strategist and developer of Ethereum, Vitalik Buterin, is a very influential theorist and practitioner in the ecosystem. Buterin writes code and blogs lucidly and engages with his critics. Buterin has matured from a boy genius to an engaged and committed young man. Gavin Wood, Joe Lubin and others who were involved with Ethereum from the get go, are still engaged. Others, too numerous to name, have been writing improvement proposals and code. They work together under the Ethereum Foundation to move the ecosystem forward. Even though it is not one big happy family, it has not been damaged enough by dysfunction to drive positive change.

The Merge and on-going upgrades have reduced the energy consumption of the ethereum system by 95%. As a smart contract forward system the power of code, the cryptographic guarantees of the blockchain, and the crypto-economic design of governance structures have synergistically yielded a powerful financial foundation with many emergent capabilities. Experimentation and production deployments have continued apace.

Significant new innovations supported by Ethereum include the whole of DeFi, encompassing decentralized exchanges powered by automated market makers, yield aggregators, stablecoins, and NFTs. Liquidity and collateral management along with governance have also been tokenized. Many of the ideas are from traditional finance with a twist. Challenges remain, among them high cost of transactions, and scaling. Confidentiality is a challenge as well.

The differences between ether and bitcoin are striking. The main force behind bitcoin, Satoshi Nakamoto, has vanished. Nakamoto is probably in the happy hunting grounds. No voice comparable to Buterins authority exists in the bitcoin ecosystem. At this stage, change in bitcoin is very difficult, especially in the core ideas and components. It is also safe to say that Ethereum would not have existed without BitcoinBTC. The SEC sees both ether and bitcoin as commodities.

As an observer and participant, I have been involved in the developing story of both Ethereum and Bitcoin for more than 8 years. It is only a matter of time before the SEC approves an ether spot ETF. Prices of ether are rising in anticipation.

Fink also says in the Squawk Box interview quoted in the first paragraph these ETP approvals are stepping stones toward tokenization of securities. Fink says that along with tokenized identity it eliminates corruption such as money laundering in the current financial system. The coming disruption of traditional Financial Markets through tokenization may be a bigger story. Ideas, methods and capital from the Ethereum ecosystem are filtering into traditional finance. As an example, J.P. Morgans Onyx and the RLN network are offshoots of Enterprise Ethereum.

I am the founder of dlt.nyc. My work as a technology consultant is backed by years as a developer and manager in capital markets, building solutions. Experiencing the dysfunction in Financial Markets Infrastructure first-hand, I was drawn to blockchain and digital technologies. I was at the table when DAH, R3 and EEA were formed. I am a community leader in Hyperledger. I helped create a project in Hyperledger labs to explore standards and CBDC called eThaler. Now working on cross platform interoperability. I am into open-source technology and its many strengths. I have coded in many languages, used many different databases and network solutions. I write lyric poetry and crypto-economic analyses. I hold a holistic view of the digital transformation underway in the financial markets and the economy. I want to explore these transformative times with my readers.

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Approvals For Ethereum Spot ETPs Could Be Next - Forbes

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A discussion over classifying layer-2 solutions (L2s) has erupted within the Ethereum community after remarks by co-founder Vitalik Buterin.

In response to a post on X by Daniel Wang, founder of Taiko, an Ethereum rollup solution, Buterin said that reliance on external chains makes a system no longer a rollup since assets cant unconditionally be withdrawn if operators collude against users.

Buterin adds, though, that despite the classification, validiums remain suitable for many other applications. Buterin notes that systems relying on external data availability (or DA, as mentioned in the tweet), such as modular blockchain Celestia, are validiums rather than genuine rollups.

Validiums and rollups are scaling solutions for Ethereum that allow more transactions to be processed off-chain, reducing congestion and gas fees.

Rollups batch transactions off-chain while posting data to Ethereum for security, providing scaling through compression. Validiums also enable off-chain transactions but use zero-knowledge proofs for validity without publishing transactions on-chain.

The main difference between the two is data availability. In a rollup, the data is available on-chain, while in a validium, the data is stored off-chain and only a hash is stored on-chain.

This difference makes validiums more efficient and versatile than rollups but also introduces a data availability risk if the data availability providers collude, censor, or go offline. Validiums are administered by a collection of smart contracts deployed on Mainnet, including a verifier contract and a data availability committee.

On the other hand, rollups publish the full data of transactions on-chain, making them more reliable and secure but ostensibly less private than validiums.

In this case, Buterin is proposing critical changes to how layer-2 solutions are classified, introducing a new taxonomy of layer-2 solutions based on more neutral strong and light labels for rollups and validiums, respectively, with the strong label denoting security-favoring solutions, and the light label representing scale-favoring L2s.

This logic is based on two distinct purposes that layer-2 solutions serve: scaling and modularity.

In terms of scaling, rollups offer compression from transaction batching, providing security inherited from layer 1. However, data storage and verification processes limit throughput. Validiums avoid this through zero-knowledge proofs that validate off-chain activity without exposing transaction details on-chain. This enables validiums to scale to higher volumes.

Regarding modularity, solutions like Celestia adopt this approach: data availability is customizable based on specific needs, and validation layers are open to independent deployment. If a classification between light and strong L2s, as Buterin proposes, is implemented, it will affect how modular chains allow customization across data and validation components.

The key difference here is how rollups mandate data availability on Ethereum, maximizing security but reducing modular flexibility. On the other hand, validiums enable adaptable data and validation layers to optimize performance but also open up trust assumptions, potentially lowering transaction security.

Ryan Berckmans, an investor in decentralized payments protocol 3cities, countered Vitalik Buterins proposed taxonomy by asserting that validiums should still be considered layer 2 solutions. Berckmans claims the L2 sector has the flexibility to define terms in ways that maximize usefulness.

To support his position, Berckmans points to L2Beat, a data provider tracking the adoption of layer-2 protocols, which currently categorizes validiums under its umbrella of L2 coverage.

However, L2Beats explainer states that validiums and other models relying solely on validity proofs rather than direct data availability on Ethereum introduce additional trust assumptions and fall outside the scope of rollup-style L2 solutions. By avoiding base layer settlement, L2Beat argues that validiums fail to inherit the security guarantees that define conventional layer-2 implementations.

The arguments reveal inconsistencies that are still present across layer-2 implementations. Projects like L2Beat aim to bring clarity but need help with contradictions as pioneering teams innovate on scaling models that dont neatly fit the current definitions.

Berckmans advocates for a functional taxonomy that includes advanced networks expanding Ethereums throughput and capacity. In contrast, Buterin and L2Beat favor more strict security-oriented criteria that validium tradeoffs fail to satisfy at a conceptual level.

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Vitalik Buterin sparks debate on layer-2 classifications - Crypto Briefing

U.Today - Vitalik Buterin, the cofounder of , the second-largest cryptocurrency by market capitalization, has recently made a significant transfer of (USDC), a stablecoin pegged to the U.S. dollar.

According to PeckShield Alert, the Vitalik Buterin-labeled address made a move of 3,300 USDC in the early hours of today.

The reason for the transfer is not far-fetched: the Ethereum cofounder was merely reshuffling funds as the said 3,300 USDC were moved to a new address.

The Ethereum price is dipping alongside the rest of the crypto market, down 5.71% in the last 24 hours to $2,246. The crypto market witnessed a slump after speculations arose about MatrixPort's bearish prediction for spot ETF approval.

Amid the current slump seen on the ETH price, crypto analyst Michael van de Poppe believes that Ethereum is still showing momentum but has a big gap to traverse to be at the same level as Bitcoin. Ethereum might see a bit of consolidation before continuing toward $3,000$3,500 during Q1, 2024.

At the end of 2023, Ethereum cofounder Vitalik Buterin published the Ethereum roadmap going forward, conceding that there are only small differences from the previous year.

Buterin stated in a series of posts on X (previously Twitter) that Ethereum's sustained focus in 2024 will be on six essential components. Buterin expounded on these six parts Merge, Surge, Scourge, Verge, Purge and Splurge in a thorough chart with commentaries and graphics.

Buterin already indicated his intention to revive the original vision of the "cypherpunk" revolution for the Ethereum blockchain, as previously reported.

This article was originally published on U.Today

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Ethereum's Vitalik Buterin Shuffles USDC Funds, Likely Reason By U.Today - Investing.com

In a recent post on X, Ethereums co-founder Vitalik Buterin proposed calling Layer 2 (L2) solutions using Celestia as their data availability layer validiums rather than rollups, sparking a discussion among crypto enthusiasts and developers about the proper classification of L2s that use Celestia as their DAL.

Some argue that validiums should be considered a distinct category, while others argue that they are a subset of rollups.

Vitalik Buterin stirred up debate about the distinction between different types of layer-2 (L2) scaling solutions, arguing that blockchains using a data availability layer (DAL) like Celestia should not be considered true rollups but rather a new category of L2s called validiums.

In response to a X post from Daniel Wang on Jan.16, Buterin agreed that a rollup using another DAL like Celestia is not a true rollup but a different type of L2 called a validium, implying that only rollups fully relying on Ethereum for data availability can be considered true rollups.

Buterins reply affirmed that for an L2 to be considered a true rollup, it must provide users with an unconditional security guarantee, ensuring they can withdraw their assets even if other users collude to prevent it. He emphasized that rollups relying solely on Ethereum for data availability achieve high-security levels. Besides, he pointed out that true rollups must rely solely on Ethereum for data availability; otherwise, there is no guarantee of security and availability. Consequently, L2s relying on an external DAL, like Celestia, should be classified as validiums instead of rollups.

Validium is an Ethereum scaling solution utilizing zero-knowledge proofs for off-chain transactions while relying on Ethereums mainnet for security and verification. Unlike zero-knowledge rollups, such as ZK-Rollups, which batch transactions on a layer-2 network and post proofs on Ethereums mainnet for security, validiums do not post any data to Ethereums mainnet. They only post proof of transaction validity, offering greater scalability as the mainnet doesnt need to verify all transactions, only the proof of validity. Technical or financial difficulties for the operator may lead to reduced data availability for validium users.

Networks like Celestia divide the blockchain into a data availability layer and a validation layer. The data availability layer stores transaction data, while the validation layer uses validiums to validate data without requiring the full transaction data.

In a recent post on Warpcast, Vitalik Buterin suggested adjusting the terminology for different types of L2s, proposing terms like strong and light instead of security-favoring and scale-favoring for clarity.

In response to Buterins proposed terminology, a prominent Ethereum community member, Ryan Berckmans, disagreed, arguing that validiums should still be considered L2 networks. He believes that a chain settling on Ethereum should be considered a layer-2 network, even if it doesnt store transaction data on the Ethereum mainnet.

Berckmans contends that the definition of a layer-2 network is not set in stone due to the blockchain industrys early stages. He suggests that the most useful definition includes both rollups and validiums, as they both inherit security from the Ethereum mainnet.

However, L2Beat, a platform offering analytics on layer-2 solutions, disagrees with Berckmans definition of a layer-2 network.

L2Beat argued that validiums and similar solutions, like optimiums, are not layer-2 networks because they introduce additional trust assumptions on top of the layer-1 blockchain.

Read also: Solana-based Jupiter confirms token release date

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Vitalik Buterin: L2s with Celestia are validiums, not true rollups - CryptoTvplus