Our experts tell us what we need to know about the new EDX exchange for institutional investors with support from Fidelity and Charles Schwab

A new crypto exchange, EDX, started operating in the U.S. It is backed by such well-known players in the market of traditional finance as Citadel Securities, Fidelity and Charles Schwab. This development could change the digital asset landscape amid increased U.S. attention to the sector.

According to the press release, EDX was launched to “meet the needs of the world’s largest and most advanced financial institutions.” And many of which are still interested in cryptocurrencies. But they are skeptical of existing platforms, also because of the regulatory uncertainty they now find themselves in. The launch of the site coincided with a surge in Bitcoin. It was just after news of an application for a Bitcoin ETF by BlackRock.

The EDX Markets exchange for institutional investors only was first announced in September 2022. In addition to Bitcoin, the exchange allows trading in three other cryptocurrencies – Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH). None of them were equated with securities in the sensational lawsuits from the SEC against major cryptocurrency exchanges Binance and Coinbase.

Unlike existing crypto platforms, EDX offers a so-called non-custodial model. And that means it won’t store customers’ digital assets during trading. Instead, EDX works with a third-party custodian. According to EDX Markets CEO Jamil Nazarali, the expectation of regulators. That crypto exchanges should be separated from broker-dealer functions, similar to the structure of traditional financial markets, will create opportunities for EDX.

Major Investors

The first capital to develop the exchange came from venture capital firms Paradigm, Sequoia Capital and Virtu Financial. By the time of launch, EDX had raised additional funding from new investors, including Miami International Holdings, GTS, GSR Markets and HRT Technology. At the end of the year, the company plans to launch its own EDX Clearing service for trades on the exchange.

The Sequoia portfolio also includes other major cryptoservices. The company has invested, for example, in projects such as Filecoiln and LayerZero. Paradigm focuses exclusively on the crypto market and has supported dozens of blockchain startups, including Uniswap, OpenSea, Synthetix, Starkware, Phantom, Optimism, dYdX, Blur and others.

The traditional market enters the cryptocurrency market

EDX customers will still be able to trade the four cryptocurrencies almost around the clock. But the site will share the functions of broker, dealer and exchange.

Many potential crypto investors are still interested in this area. But they are wary of the inherent volatility of the crypto market. Taking the example of the traditional stock market. And now EDX wants to attract these risk-averse customers. The exchange is aimed primarily at large investors. As well as those investors who are put off by the regulatory uncertainty and instability of the crypto industry.

Instead of retail investors trading cryptocurrencies directly through the EDX platform. And as is the case with other exchanges, they will interact with intermediaries. A similar approach is taken, for example, in stock trading on the New York Stock Exchange (NYSE). The reliability of such intermediaries is also an argument for potential clients.

“There’s no way someone trading through a reliable intermediary will lose a hard drive with $200 million worth of cryptocurrency keys and then spend years looking for it in a landfill,” says Jamila Nazarali, CEO of EDX Markets. And recalling that such cases did occur.

Our experts point out that the site will also provide clients with access to more favorable prices through transactions with special quotes for retail-only quotes. Because institutional traders often buy the asset in large quantities. Their transactions often lead to an increase in the price of such an asset, which leads to losses for market makers. To minimize this, the platforms can set inflated commissions. And which will be strongly felt for retail traders who trade in much smaller volumes. By isolating retail trading, EDX can offer clients better prices for small trades.

Our experts tell us how a complex cryptographic concept found application in the cryptosphere. And why startups that use ZK technology attract millions of dollars from investors

As early as 2019, cryptocurrency-oriented venture capitalists have been supporting startups. Which are engaged in the development of technical solutions somehow related to zero-knowledge proofs technology (zero-knowledge proofs or ZK-proofs, ZK). It is largely thanks to the cryptosphere that the complex cryptographic concept has become a successful marketing tool for startups. Who are creating tools to optimize Ethereum and other networks.

Matter Labs has raised nearly $0.5 billion from foundations to develop its zkSync solution. And the launch of Polygon’s zkEVM software environment by Polygon Labs, with similar funding, was an event in the cryptocurrency community. Projects like Starknet or Scroll are worth billions of dollars. And they all use ZK-proofs technology in one way or another.

In 1985, scientists Shafi Goldwasser, Silvio Micali and Charles Rakoff published a paper called “Knowledge Complexity of Interactive Proof-Systems. This was the first theoretical formulation of zero-disclosure proof technology.

To greatly simplify, this cryptographic technique allows you to prove that you know something without revealing exactly what you know. In the context of cryptocurrency, this can be illustrated, for example, as verifying that the user has the funds to transfer. And without revealing to the other participants of the network who this user is and how much money he has in his wallet.

Such proofs are technically complex and computationally intensive

Since it is very complicated, this technology did not come to any practical realization for quite a long time. And it was discussed mainly in scientific circles. But starting in 2010, researchers realized that ZK-proofs can be implemented on current computers.

So too with the emergence of faster computers and more funding for research in cryptography. And researchers, including Georgetown University associate professor Justin Thaler, have described how to generate zero-disclosure proofs on real computing machines. Thaler is also a researcher at a16z crypto, a division of the venture capital firm Andreessen Horowitz. He also manages four funds to invest in blockchain projects totaling more than $7 billion.

The launch and distribution of cloud computing has also given further impetus to the adoption of the technology. Laptops or smartphones, for example, are slower than the combined power of Amazon’s servers. But with ZK-proofs, a single computer can confirm that multiple computers have executed the program correctly.

When Bitcoin emerged in 2009, there was early discussion about reducing the computational burden on the blockchain and privacy in the blockchain. And then two problems emerged – the relatively slow performance of the blockchain because of its decentralized structure. And also its transparency, allowing analysts to identify and track wallets with ties to real users.

In 2013, a group of scientists, based on improvements in the implementation of ZK-proofs technology, laid out proposals for a Zerocoin solution. And which was supposed to help make Bitcoin transactions completely anonymous. Teaming up with Zuko Wilcox, they eventually launched the cryptocurrency Zcash (ZEC). It was probably the first implementation of ZK-proofs technology on a large scale.

Essence of ZK technology for cryptocurrencies

The essence of technology in the context of cryptocurrencies is not just about privacy. When Ethereum grew in popularity with the spread of blockchain technology. And more and more developers were creating more complex applications to run on it. But they, in turn, needed ways to increase the speed of applications. Ethereum, to simplify things a bit, is essentially a decentralized computer that runs relatively slowly.

Ethereum co-founder Vitalik Buterin has repeatedly said that it is solutions using ZK-proofs. And in particular the so-called ZK-rollups will help to increase the bandwidth of the network. And in the future will be integrated into its software code.

Zero-disclosure proofs allow one to prove the truth of something without checking each statement. Using this property, solutions such as zkSync “minimize”. That is, they compile and process transactions outside of the main Ethereum blockchain and prove that they did so accurately. Already then the main blockchain only verifies this proof. And that takes significantly less time compared to verifying each transaction in the usual way.

Dozens of startups are developing a flood of solutions using ZK, including the same zkSync, Aztec, Scroll, Starknet and others. They compete with another group of Ethereum scaling solutions collectively called Optimistic rollups. And the best known of which are the Optimism and Arbitrum projects. The companies have formed an entire industry within the crypto market and have collectively attracted several billion dollars from investors.

Accelerate Ethereum

On June 8, the Taiko project announced that it had raised $22 million to develop its own zkEVM. It is a solution that Vitalik Buterin called essential for scaling the Ethereum blockchain.

The zkEVM (Zero-Knowledge Ethereum Virtual Machine) is a development that combines Ethereum capabilities with the concept of zero-knowledge proofs. It was the company behind the zkSync solution that Matter Labs first deployed its version of zkEVM to the public along with the launch of the zkSync Era network.

The zkEVM solution is primarily a tool for scaling Ethereum. But which also includes privacy enhancing features. It combines the benefits of ZK-proof technology and compatibility with the Ethereum Virtual Machine (EVM) application environment. While providing faster, cheaper and simultaneously more private transactions.

Simply said, zkEVM allows developers to create second-tier solutions such as ZK rollups. This helps reduce congestion and bandwidth constraints on the core Ethereum network. And that leads to faster and cheaper transfers. The approach of projects like zkSync allows fast and inexpensive transactions in Ethereum. While maintaining data security and privacy.

Our experts point out that the slow operation of the network and high commissions hinder the mass spread of blockchain technology. Therefore, it makes sense for investors to support startups that offer efficient solutions.

The U.S. regulator named securities as the closest competitors of Ethereum. Our experts told us what risks this brings for ETH

From June 5 through June 6, cryptocurrency rates reacted to the SEC’s lawsuit against two major exchanges with a dramatic drop. Bitcoin and other cryptocurrencies fell in price, but by the morning of June 7, they partially recovered their losses. Ethereum was no exception and on June 6 updated its low from May 25 at $1802.

In lawsuits against two major exchanges, the SEC named several cryptocurrencies as securities. These assets reacted with fall of rates more strongly than others and fell in price by 6-15%.

In the first lawsuit were called securities: Solana (SOL), Cardano (ADA), Polygon (MATIC), Filecoin (FIL). As well as Cosmos (ATOM), Sandbox (SAND), Decentraland (MANA). And Algorand (ALGO), Axie Infinity (AXS), COTI (COTI).

In the second lawsuit, Chiliz (CHZ), Flow (FLOW), Internet Computer (ICP) joined them. As well as NEAR Protocol (NEAR), Voyager VGX (VGX), Dash (DASH) and NEXO (NEXO).

Despite the fact that the commission named Ethereum competitor coins (e.g., Solana), the largest ETH itself avoided a similar fate. None of the lawsuits mentioned it as a security.

Why the SEC chose the cryptocurrencies it named in the lawsuits

The SEC sampling algorithm is completely incomprehensible. And it defies logic, our experts note. Either the initiators of this process have outdated data. Even from the time of PoW mechanism in Ethereum network (till September 2022). Or it’s a “show punishment” for trading “tokens nobody needs,” says our expert.

SEC head Gary Gensler told CNBC that cryptocurrencies are essentially unnecessary at all. “We already have a digital currency. It’s called the U.S. dollar, the euro or the yen,” Gensler said.

The very arguments of the U.S. regulator regarding the recognition of PoS and DPoS (validators, not miners) projects as securities are “ridiculous.” But in the moment, these accusations can “create panic among investors” and provoke a local price collapse.

Long-term prospects for Ethereum are positive

If we consider the long-term prospects of Ethereum. It has much more growth potential than even Bitcoin. Because BTC’s growth comes from its status as the first cryptocurrency. As well as popularity and scarcity, which led to the leading position in infrastructure development.

For ETH the main growth driver is the area of decentralized finance (DeFi), says our expert. DeFi is still in its infancy. And in the future it will be able to push the price of ETH, which provides the infrastructure for DeFi projects.

Short-term ETH prospects

For short planning horizons on Ethereum, things are very complicated. Our experts note that on the one hand, Ethereum benefited from the fact that it was “forgotten to be mentioned” in the lawsuits.

But on the other hand, if ETH will be “remembered” later. It could repeat the fate of those coins that are already on the SEC list. As some investors exit from these coins, the assets are rejected by the platforms. Therefore, the risks remain, our Crypto Upvotes expert warned.

Our Crypto Upvotes experts tell us how Ethereum zkSync scaling project with $458 million investment is organized. Why it is used by leading players of the cryptosphere and what conditions the developers name for launching their own token

The mass distribution of cryptocurrencies and Web3 projects is held back by the relatively slow performance of blockchains and high fees, especially during periods of heavy network load. One of the popular technical solutions to increase Ethereum blockchain throughput is the so-called ZK rollups. And the implementation of which is a key part of the Ethereum roadmap. And also about which the co-founder of the project Vitalik Buterin repeatedly spoke.

Such solutions exist on top of the main Ethereum blockchain. And they combine a set of transactions into packets, process them in their own network and then transmit them to the main network. By doing so, they increase the speed of transfer processing and significantly reduce fees. This fee is paid by users every time they interact with the blockchain. For example, when transferring coins, transactions in credit protocols. Or during an NFT purchase or any other Ethereum usage scenario.

If at the base level Ethereum processes no more than 15 transactions per second. The so-called Layer 2 (L2) solutions allow tens of thousands of transfers per second with multiples of smaller fees. There are many competing startups in the race to create the most successful Ethereum scaling solution. For example Polygon, Arbitrum, Optimism, Scroll, StarkWare, Fuel Network and others. They have formed an entire industry. And the largest projects are valued in the billions of dollars.

zkSync project

The most famous solution involving those same ZK rollups. And of which Buterin speaks is zkSync from Matter Labs. Last November, Matter Labs closed a $200 million investment round led by major crypto venture capital funds Blockchain Capital and Dragonfly. Other investors include LightSpeed Venture Partners, Variant and Andreessen Horowitz (a16z). Matter Labs raised a total of $458 million, and that in itself is one of the largest venture capital investments in the history of the crypto business.

Commenting on the closing of the investment round, Matter Labs product director Steve Newcomb told Fortune. About how most of the funding will go to “building a team, further growing, scaling and developing a full-fledged company.” Newcomb founded Powerset before working at Matter Labs. Which was bought by Microsoft and later became part of the search engine Bing. Anthony Rose is also on the zkSync development team. He also led engineering teams at Ilon Musk’s SpaceX, creating software solutions for Falcon, Dragon and Starlink.

The zkSync project roadmap and its development

After reaching several roadmap milestones, the zkSync project has two networks in its current form, Lite and Era. The capabilities of zkSync Lite are limited, and it is essentially the first version of the protocol.

However, zkSync Era is a more mainstream product, opened to a wide range of users and developers in March of this year. The network was the first fully launched software environment with support for Ethereum applications. And thus beating out competitors like Starknet or Polygon. This means it will be easier for developers to migrate applications to zkSync Era. And where they can take advantage of faster transactions and lower fees.

Many of Ethereum’s biggest projects are already deploying on zkSync Era. Among them are popular decentralized finance (DeFi) services such as Uniswap, Curve, Balancer, Maker and SushiSwap. In addition, zkSync Era is used by Circle, cryptocurrency wallet creator Argent or liquid staking service Rocket Pool.

An important feature of zkSync Era is the so-called account abstraction.

And with the help of which it is possible to introduce to crypto-purses the features familiar to more mass users. For example, two-factor authentication or simple access to the wallet through login and password. As a rule, most of crypto-purses are just standard addresses. Which can send and receive funds and interact with smart contracts. With zkSync Era’s solution, developers can adapt to the needs of a wider audience.

Matter Labs representatives say in various interviews that the company is generally geared toward working with traditional businesses. They are particularly interested in the game development industry. In late May, the company hired former Activision Blizzard vice president of community engagement Michael Lee as senior vice president of development. To focus on attracting game developers to the zkSync platform. Earlier, Wemade, a leading Korean blockchain game developer, announced a partnership with Matter Labs. Which is developing the WEMIX PLAY platform. And which, according to the company’s website, has more than 20 million active users.

Launch of zkSync token and airdrop

zkSync has long been considered in the cryptocurrency community as one of the first candidates for mass airdrop . Several large blockchain projects, among them Optimism, Aptos, Blur or Arbitrum, have conducted airdrops for early and active users. And who have received rewards worth thousands of dollars. This has sparked speculation that other projects will follow suit.

Given the impressive amount of investment raised and several other circumstantial signs. And that’s why zkSync is considered one of the most obvious contenders to issue a token and conduct an airdrop. At the end of March, the zkSync ecosystem projects saw a marked increase in activity and turnover following Arbitrum’s sensational token giveaway. At the time of publication, turnover in the zkSync Era network, according to analytics service DefiLlama, exceeds $157 million and continues to grow.

The community notes that the main reason for this may be the accrual of activity. Or so called airdrop pharming. This is when users create a lot of wallets, from which they spend a certain set of actions in network projects. And in doing so, expecting to get more tokens as a reward in the future if the project decides to do an airdrop.

The zkSync developers themselves are apparently aware of what’s going on. As Matter Labs’ Anthony Rose said in a comment for DL News, project teams “should always monitor speculation around tokens and airdrops.”

The company removed the “tokenomics” section from the zkSync website, which was present there until last October. The documentation stated directly that the network’s own token was planned to be used for staking and as collateral for the network’s validators.

Our experts note that the ZkSync Era network remains largely centralized for now. And Matter Labs can arbitrarily update its software code. The company still controls the so-called sequencer and prover. These are the two main components of the network. As Matter Labs CEO Alex Gluchowski clarified, the project will only need a token when it becomes necessary to make the sequencer decentralized. He estimated that this will happen in about a year.

Our Crypto Upvotes experts summed up results of May on the crypto market. And gave their forecasts for leading cryptocurrencies for the nearest future

May was the first month this year that Bitcoin closed with a loss in price. On January 1, BTC was trading around $16.5 thousand, on February 1 – $23.13 thousand, on March 1 – $23.15 thousand, on April 1 Bitcoin rate reached $28.5 thousand, and on May 1 – $29.3 thousand. By the last day of spring the price of BTC went down to $27.7 thousand.

But despite the BTC price decrease by 5.5% in May, it has grown by 67% since the beginning of the year. The total market capitalization of the cryptocurrency decreased by 3.3% in May, but has increased by 41% since the beginning of the year.

Last month on the cryptocurrency market went mainly in the decline in the prices of leading assets

The growth was observed only in certain projects, such as Ripple. And it was primarily due to internal fundamental reasons.

Otherwise, the correction in the cryptocurrency market within the uptrend of the beginning of the year continues. And to say that the market has found the bottom and will go into active growth, it is not necessary yet, says our expert.

May has not been very good for BTC so far this year, with almost 6% fall of the exchange rate. Despite this, we have not seen a strong collapse. For example, as it was in May of the previous few years. Over the past month, BTC and other major cryptocurrencies by market capitalization were in consolidation phase.

On May 25 the price of Bitcoin updated minimum of two months, sinking to the point of $25.8 thousand. But by the end of May BTC got out of this pit, and steadily crossed the point of $27 thousand.

This decline can be attributed to market instability caused by problems in the U.S. banking sector, says our expert. Recession inevitably leads to higher borrowing costs for individuals and companies. And investments are losing yields. So investors tend to invest in conservative instruments. Cryptocurrency traditionally fades into the background at this time.

The U.S. Treasury Department is actively working to reduce inflation. And if it succeeds, then the cryptocurrency segment of the market will go back to growth

Our experts say that even with the current Fed rate, Bitcoin will be able to stop the decline. And even begin to rise in price, albeit slowly. The same will happen to Ethereum and other popular cryptocurrencies.

The most important key events for the crypto market in June. These are reports on the U.S. business activity, inflation and unemployment index, which are published at the beginning of the month. Then after these reports, on June 14, there will be a Fed meeting on the interest rate. And the change of which could very strongly influence the rate of BTC and altcoins.

In case of good economic reports we may expect that the current price level will be kept. In this case, it will be a positive signal for the crypto market. And that will push the BTC price up, to the current resistance level of $31,000, and possibly higher.

Historically, June is considered a low month for Bitcoin. And for the past three years, its exchange rate has fallen in June, our experts remind us.

In May, Bitcoin was supposed to show BTC down to the $25k level. However, it fell slightly short of that target. At the same time, as in the case with Bitcoin, our experts also expect other assets to decline in prices in June.

For example, the correction target for Ethereum is at $1.6k. And other assets with high market capitalization, such as BNB, XRP, ADA, MATIC may also decrease by 5-15% in the first month of summer, our expert thinks.

As for the fundamental aspects, the attention of market participants remains focused on macroeconomics in the USA. Because the pause in rate hike at the June FED meeting is already built into the current prices. But in case of divergence with market expectations, cryptocurrency may decline synchronously with stock assets.

Important events in June among other top 30 cryptocurrencies

Among all cryptocurrency assets from the top 30, Litecoin (LTC) may be stronger than the market. That’s because the LTC network will be halving in August. It is historically bullish on the cryptocurrency exchange price. Also LTC can become one of the leaders of the subsequent market growth. And even if it won’t show good growth in June.

Our experts Crypto Upvotes note that in June several major unlocks of cryptocurrencies are expected. For example such as 1inch Network (1INCH) here will be released 16.6% of the total supply. And Blur here will unlock 6.62% of the total supply. Our expert warned that after unlocks there is usually a fall in asset prices.

Crypto-Upvotes experts told about profitable trading strategies for the medium and long term

The crypto market switched to a bearish trend in the short term on the horizon of a couple of weeks. Bitcoin failed to consolidate above $30,000. And following the largest cryptocurrency, other crypto-assets also went to the decrease. Crypto-Upvotes experts believe that now the best strategy will be to wait for optimal conditions to increase positions in selected digital assets. The overall picture remains generally positive. And we should expect an uptrend in the medium to long term.

Buying Bitcoin is worth considering in case its rate drops below $26.5K. The price of the first cryptocurrency in the coming week may show high volatility ahead of the Fed meeting on the key rate. Our experts consider a comfortable level for increasing positions in BTC at $25.5-26 thousand.

The same approach applies to Ethereum or BNB. Both cryptocurrencies quite well worked off the bullish trend in previous weeks. And now the pullback in the medium term has expectedly begun. This means that it is not worth to enter these assets now. It’s more effective to wait and buy when their rates reach the support level of $1700 and $300 correspondingly.

Also in the medium term, on the horizon of several months, all cryptocurrencies mentioned above are likely to show growth. And the main wave of the bullish cycle will start in the second half of the year ahead of the bitcoin halving in the spring of 2024.

Halving is the code’s embedded halving of miners’ rewards for a found block in the bitcoin blockchain. On May 11, 2020, the network’s reward dropped to 6.25 BTC. The next reduction to 3.125 BTC is expected in April-May 2024.

Other trusted cryptocurrencies from our Crypto-Upvotes experts

In addition to the cryptocurrencies mentioned above. It is also worth following the movement of cryptocurrencies from “second-tier” networks. These are such as Cosmos (ATOM) and Arbitrum (ARB).

The Cosmos interconnect ecosystem continues to be successfully filled with liquidity. And interest in products from this ecosystem is clearly growing. The potential in ATOM, (the Cosmos blockchain cryptocurrency) suggests that there is a 3-5x growth opportunity here by the end of 2023.

As for Arbitrum, it is an asset that can now be considered for purchase. The coin’s price already takes into account the negative effects of the blockchain management scandals. That said, the total locked-in value in Arbitrum’s smart contracts continues to rise. And that’s a good sign for long-term investors.

Disclaimer:

Crypto-Upvotes does not provide investment advice. This material is published for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.

Despite the rise of Dogecoin, the token Lido Staked Ether passed the meme coin in market capitalization and came in at number 8. Crypto Upvotes expert review

The top 10 cryptocurrencies changed with the rise of Ethereum (stETH). The Lido Staked Ether (stETH) token overtook Degocoin (DOGE) in market capitalization on April 14. And in doing so, it climbed to 8th place in the top 10 crypto assets.

Lido Staked Ether is a token issued by the staking platform Lido to users. Who have staked Ethereum. In exchange for inputting ETH, the platform gives out stETH tokens in a 1:1 ratio. They are also used to accrue income from staking.

StETH tokens give users the liquidity of their underlying positions. At the same time, they allow users to trade them or use them to generate additional income through various strategies in decentralized finance (DeFi) protocols.

Lido Staked Ether rose at the same time as Ethereum. According to CoinMarketCap, it rose to $2,100 in 24 hours. Its market capitalization reached $12.5 billion, which matches the price of ETH staked on the Lido platform.

Despite the fact that Dogecoin showed a growth of 6.5% in the last 24 hours. Then the capitalization of stETH exceeded that of the meme coin, pushing it to the 9th place among the leading digital assets.

Rates of native cryptocurrency staking platforms also rose. Lido DAO (LDO) management token gained 7.9% over the day, while Rocket Pool (RPL), an asset of a competing service, added 16.7%.

Our experts talked about trends in the staking cryptocurrency niche after the Shapella update and its impact on cryptoasset prices

The price of Ethereum cryptocurrency (ETH) crossed the $2,000 mark for the first time since August 2022. After a major blockchain update of the second largest cryptocurrency took place. And fears of a massive outflow of funds from the network were not confirmed. Since the beginning of the year, the coin has grown by more than 60%.

The fears of many market participants were not justified

The April 13 update to the Ethereum blockchain, working title Shanghai. Which was made as part of the Shapella update group gave investors the opportunity to withdraw coins on a first-come, first-served basis. Which they placed as collateral in a special Beacon Chain smart contract, launched back in 2020. This gives them the status of a transaction validator on the network and allows them to be rewarded by issuing new coins, a process called staking.

Accumulated rewards also became available for withdrawal to the wallets. According to the analytical service Nansen, in the first 12 hours after the activation of the update, investors withdrew only 0.3% of the 18 million ETH. Which were placed in the contract for staking.

Contrary to the fears of many market participants, the rate of ETH tested $2,000. It’s safe to say that traders and investors took the update positively. The possibility of withdrawal of coins [from staking] is limited. As it can put pressure on the price.

Only 43.2 thousand ETH can be unlocked in a day. About 170 ths ETH will be sold at market price in the near future. But even if coins will be withdrawn at the maximum allowed limit per day. That figure would fit into the average ETH inflow to the exchanges and would not critically affect the price of the coin. It’s important to understand that many validators are just now starting to test the new feature. And they are withdrawing exactly the earned funds and not the deposit of 32 ETH. Accordingly, they plan to validate transactions further, our experts explain.

What will happen to the price of ETH in the next week

According to Coin Metrics analyst company, about 1.2 million ETH are expected to be withdrawn from staking in the next five days. Which is equivalent to about $2.3 billion at current prices. About $36.7 billion in Ethereum coins remain in the Beacon Chain.

The price of ETH could experience fluctuations in the coming weeks. As some investors will rush to withdraw coins and sell them. But those who were not ready to freeze their assets before. Then now on the contrary, may decide to place coins in a smart contract. Most likely, the upgrade of the network in the medium to long term will lead to the growth of ETH exchange rate. But before that, a period of increased volatility is possible, our experts say.

Staking as a service

Self-staking Ethereum involves setting up equipment. And mandatory minimum deposit of 32 ETH. But even more private investors use stacking services on cryptocurrency exchanges. And decentralized platforms that provide the service of so-called liquid staking.

In this case, exchanges or services act as a validator. Which pools users’ funds into a single pool with a user-friendly interface. And also with the reward for staking in proportion to their investment. The largest staking platform Lido. At the same time, being a validator, manages about 31% of all ETH in staking. Binance, Coinbase and Kraken crypto exchanges are also in the top five largest validators.

Staking from crypto exchanges

The main advantage of staking services from exchanges is simplicity. The user does not need to understand the intricacies. The user only has to press a couple of buttons and be assured that staking works. Interest payments are made by the exchanger. And it also takes the rights and responsibilities. If there are any difficulties, you can write to the support service and get an answer in a short time. This is always suitable for beginners. That is why the popularity of staking through exchanges or platforms will not suffer much from Ethereum updates.

The possibility of unlocking coins is unlikely to have much effect on the popularity of staking services. Their target audience is not so much those investors who were not ready to freeze their assets. But those who simply don’t have 32 ETH to place in a smart contract. The demand for the service, even if it falls, is insignificant, our experts say.

Kraken leads in the number of applications to withdraw coins from staking. The U.S. exchange accounts for more than 86% of the total amount of ETH. Which are now “in line” for withdrawal. The exchange was forced to stop its staking service in the U.S. and pay a $30 million fine when the Securities and Exchange Commission (SEC) recognized its staking service as the equivalent of illegal sales of securities. Because of such bans in the U.S., it is the decentralized platforms where coins will be put. The use of which the SEC will not be able to prohibit technically.

Staking on decentralized platforms

Decentralized liquid staking services allow you to invest in staking coins from Ethereum and other blockchains. Which work on the Proof-of-Stake (PoS) algorithm. And receive derivative tokens of equal value in return. Which are also traded on cryptocurrency exchanges. And can be used for additional earning strategies. Examples of such platforms include Lido, Rocket Pool, Stakewise, and others. Many of them issue their own tokens. Which give you the right to vote in DAOs or get discounts on fees for services.

Our Crypto Upvotes experts point out that the investment appeal of such platforms’ tokens depends not only on the set of their services. But also their overall marketing performance, turnover and trends in the market. Some platforms don’t have a token. But this does not prevent them from attracting users. For example, stake.fish is popular due to the experience and reputation of the f2pool behind it. It is a well-known brand in the niche of mining pools.

Tokens of the largest staking platforms also benefited from the successful Ethereum update. The tokens of Lido (LDO), Rocket Pool (RPL) and Stakewise (SWISE) showed growth of 6-7%.

PostFinance, Swiss national postal service’s bank division, will give customers access to buy, hold and sell Bitcoin and Ethereum

PostFinance, the Swiss post office bank, will partner with Sygnum Bank, a Swiss digital asset bank, to open up cryptocurrency transactions to more than 2.5 million customers. The cryptobank said in an announcement that PostFinance customers will be able to buy, store and sell cryptocurrencies such as bitcoin and Ethereum.

PostFinance is one of Switzerland’s largest retail banks. It is wholly owned by the Swiss Post, which in turn is owned by the state. According to the bank’s website, more than 2.5 million people use its services.

Bank Sygnum is licensed as a provider of cryptocurrency services in Switzerland. And it serves a range of institutions, including cantonal and private banks. PostFinance is integrating Sygnum’s b2b platform into its infrastructure.

According to the report, PostFinance has analyzed the investment needs of its customers. And it identified a high demand for digital investment services.

“Digital assets have become an integral part of the financial world. And our clients want access to this marketplace at PostFinance,” said PostFinance Chief Investment Officer Philip Merkt.

PostFinance’s decision to switch to cryptocurrency was driven in part by an outflow of funds from Swiss retail banks into the digital asset class.

PostFinance has noted a multi-million dollar outflow of funds to cryptocurrency exchanges in recent years. So not only did the bank see an opportunity to generate new revenue in its work with digital assets. But it also realized that it made a big difference in retaining existing customers.

Our experts note that in addition to Bitcoin and Ethereum, PostFinance will later add other cryptocurrencies.

Participants of the Arbitrum airdrop project received thousands of dollars in rewards. Review by Crypto Upvotes experts on how the sphere of earning tokens for activity in blockchain services is organized and what other projects can make an airdrop.

Offchain Labs, the company behind Arbitrum, organized an airdrop of tokens to encourage active users of this ecosystem. On March 23, token trading under the ticker ARB started on major cryptocurrency exchanges, and after a period of strong volatility at the time of listing, its price on trading floors stabilized at $1.2. Tens of thousands of addresses received between 3,000 and 10,000 tokens during this distribution. Thus, participants received significant amounts of incentives in dollar terms and caused a stir around other projects. Which in the future may make their own airdrops.

Airdrop is a new form of successful project launch ?

The idea of free distribution of coins to users is not new. The first airdrop, after which the term became popular, was invented by the developers of cryptocurrency Auroracoin back in 2014 at the stage of mass cryptocurrency market birth. According to their idea, every resident of Iceland was supposed to get coins. That project was quickly forgotten, but the concept itself became popular in the crypto industry and continued to evolve.

Now, airdrops serve as an effective method for blockchain services to attract an audience. It is also likely to increase the loyalty of users who receive rewards in the form of project tokens. Some ecosystem decentralized projects, in which investors see potential, conduct multimillion rounds of funding with the participation of famous funds like Sequoia or Andreessen Horowitz.

What is Project Arbitrum. And why it’s the most expected airdrops of this year

A few years ago, crypto companies chose different forms of ICO (initial coin offering) to raise capital and liquidity. Now there is a risk that tokens will be classified as unregistered securities in the U.S. or Europe when raising funds this way. The free distribution of tokens helps create a market for crypto projects. At the same time, most of their supply stays with developers and investors. At the same time, it creates a financial base for the former and a source of profit for the latter.

Developers of blockchain services often do not announce a token when launching their project. But the experience of their competitors helps community members determine which projects will sooner or later decide to release their own crypto-asset. And which types of activities will be eligible for rewards.

This was the case with Offchain Labs: an infrastructure has already been built around Arbitrum – decentralized exchanges, NFT marketplaces, games, wallets, social networks and other services. All of them are at an early stage of development and need active users and testing. It is for activity in such projects that tokens are eventually distributed.

The company remained silent about its airdrop until recently. But the successful experience of large projects such as Aptos, Blur or Optimism ( the main competitor of Arbitrum) made it clear that participation in projects on the Arbitrum blockchain. Most likely, in the end, will not remain without encouragement from developers.

From which projects to expect launch of new Airdrops

The first obvious candidate is zkSync, an Ethereum scaling solution with a different technical approach than what Arbitrum or Optimism offer. In November 2022, zkSync developer (Matter Labs) led several investment rounds totaling $258 million. And LightSpeed, Andreessen Horowitz as well as major venture capital crypto funds – Blockchain Capital and Dragonfly took part in them.

The zkSync development team includes Anthony Rose, who led engineering teams at SpaceX, creating software for Falcon, Dragon, and Starlink. And Steve Newcomb, who founded Powerset, which was acquired by Microsoft and later became part of the search engine Bing.

In one week before the launch of token from Arbitrum, users transferred $8 million in assets to projects in the zkSync ecosystem. According to DefiLlama, the amount of funds (total value locked) locked in the pool of the decentralized exchange ZigZag. Which runs on the zkSync platform, rose from $1.5 million to more than $13 million in just one day. In a comment for Coindesk, Martin Lee, head of analytics platform Nansen, says that it was the distribution of Arbitrum tokens that triggered the increased activity of “airdrop hunters.” They have attracted both new entrants and those who have participated in airdrops from other projects.

Other potential candidates for future airdrops include several other projects:

StarkWare – Ethereum scaling solution, similar to zkSync. The developer is the Israeli company StarkWare Industries, with an investment of over $150 million and an estimate of $8 billion.

Scroll – a similar Ethereum scaling solution. The project has attracted funding of $80 million with an estimate of $1.8 billion.

Fuel Network – an Ethereum scaling solution similar to Optimism or Arbitrum. The project’s developer, Fuel Labs, raised $80 million in funding in September 2022.

Aleo – DeFi-protocol with a focus on privacy. The developers of Aleo Systems raised $200 million from SoftBank, Andreessen Horowitz, Samsung Ventures and other funds.

LayerZero – a protocol for exchanging data between blockchains from different ecosystems. The company behind the development, LayerZero Labs, has raised more than $173 million, with investors including PayPal Ventures and Andreessen Horowitz.

Other major projects without their own token include Sui, Celestia, Sei, Linera and others.

Terms of participation in airdrop from similar projects

As a rule, the developers of such projects do not name any criteria or conditions, fulfilling which it will be possible to get tokens in the future. Moreover, none of them guarantee the availability of airdrop for early users or the launch of a token. Activity sets are formed in the community based on the experience of predecessor projects. And when an airdrop is announced, the project team decides for itself each time who can claim their tokens and for what.

Some projects have even given away tokens for a single interaction with the ecosystem. And in the case of the Blur Marketplace, for example, a full-fledged multilevel airdrop strategy with a gamified approach was developed.

Risks from participation and scammers

Anonymity when using cryptoservices opens the door to manipulation. According to a joint study by journalist Colin Wu and the blog x-explore, about 150,000 addresses and at least 4,000 groups were identified in the Arbitrum airdrop.
Which are engaged in activity generation, which accounted for more than 253 million ARB tokens. And that’s about 22% of the entire airdrop.

There is growing evidence on the web that organized groups typically in countries such as Vietnam or Bangladesh – are scamming activity in blockchain projects. They use multiple accounts and wallets, working in offices on a schedule and getting paid. Our Crypto Upvotes experts managed to find several international groups in Telegram and Discord messengers. In these groups administrators offer services of “outsourcing” activity. Prices for the services range from $10 to $200 per account, depending on the project and activity set.

The growing popularity of cryptocurrency airdrop is being actively exploited by scammers. Interacting with blockchain projects implies a certain level of technical expertise. Therefore, inexperienced users often become victims of scammers. Tens of thousands of phishing pages appear on web that imitate sites of famous projects.

Sometimes these sites are designed with attention to detail and have high-quality design and convincing scenarios of interaction with the victim. It helps to avoid risks by interacting only with the official resources of the services. Where they also post links to ecosystem projects in which it is possible to participate, claiming a future airdrop.