White Star Capital Digital Asset Fund - newsletter #111
Polygon successfully completes hard fork
Polygon Successfully Completes Hard Fork
White Star Capital Digital Asset Fund - newsletter #111
On Tuesday at 5:$5am ET, Polygon, an Ethereum scaling project, hard forked. The goal was twofold: 1) reduce the severity of gas spikes, and 2) address disruptive chain reorganisations that increase time to finality and can be a security risk. Combined, these upgrades will improve user experience, and catalyse Polygon’s rapid adoption even further.
What is Polygon?
Polygon is Ethereum’s most popular sidechain, designed to support infrastructure development and help Ethereum scale. Its proof-of-stake chain enables users and developers to interact with Ethereum with faster throughput and lower fees. For reference, Polygon can scale up to 1000 TPS compared to the 15-20 TPS of Ethereum.
It has amassed tens of thousands of decentralised apps, over 207m unique addresses, and over 2.3bn processed transactions. It is also home to the most institutional adoption in Web3, with companies like Robinhood, Reddit, Adobe, Stripe, Starbucks, and Meta all having used Polygon for various product launches.
What Were The Proposed Changes?
Polygon has dramatically lower gas fees than Ethereum mainnet, however that does not mean it is immune from activity spikes that can still clog the network (as happened, for example, with the NFT game Sunflower Farmers last year). The hard fork reduces the size of gas fee spikes due to a change in the denominator in the equation determining the gas fee for each block. By increasing this value from 8 to 16, gas fees should increase by smaller increments, thereby reducing spikes. To be clear, with this upgrade, users should still anticipate a rise in gas fees when on-chain activity increases, but it does mark the end of extreme fluctuations of gas fees.
Another improvement is in reducing chain reorganisation- which is when a block is deleted from the blockchain to make room for a new, longer chain to ensure all node operators have the same ledger copy. They cause blockchain networks to temporarily split in two, which can lead to lost or duplicate transactions. Last year, Ethereum’s Beacon chain suffered from a reorg that left it vulnerable to duplicate transactions and a 51% attack. Polygon’s hard fork tackles the chain reorganisation problem by decreasing sprint length and therefore the time it takes to validate transactions and produce a block.
Hard Fork Explained
Unlike soft forks, hard forks were not backwards-compatible. They can be contentious for this reason, and so will normally require a vote. After this fork was proposed in December, 87% of voters of the Polygon Governance team voted in favour, so the fork went ahead on Tuesday after being coded for the block >= 38,189,056. No holders or developers had to do anything, and no centralised, single actor initiated it- validators of the network just had to update their nodes prior to the indicated block.
🔦 White Star & Portfolio Spotlight
Cometh Battle is proud to be the first game integrated into the Ledger Live app!
Play Cometh Battle on Ledger Live and conquer the galaxy without worrying about your on-chain security
Alethea AI is proud to introduce CharacterGPT
The world's first Multimodal AI System that generates interactive AI Characters from a description in natural language. In short, CharacterGPT enables Text-to-Character creation.
Liquality is now available in the Chrome Store!
The Liquality Wallet is an extension for accessing Bitcoin, Ethereum Web3, Rootstock, NEAR, Polygon, Binance Smart Chain, and Arbitrum applications in your browser.
🏦 Enterprises & Institutions
Circle Taps Deloitte as New Auditor, Doubles Down on Proof of Reserves
Circle, who for years partnered with firm Grant Thornton for its audits, makes the switch to Deloitte as various accounting firms express concern over working with crypto companies.
Ukraine Bank Finds Stellar Blockchain Brings ‘Key Advantages’
A two-year study from TASCOMBANK, for the most part, adds a Stellar splash of fuel to the developing crypto economy of Ukraine.
Binance Will Allow Institutional Investors to Keep Collateral Off the Crypto Exchange
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Samsung investment arm considering spot-Bitcoin ETF in Hong Kong
With the Hong Kong Stock Exchange being the only regulated exchange in Asia offering Bitcoin futures ETFs, some believe spot crypto ETF products will soon be allowed.
⚖️ Government & Regulation
EU's final vote on MiCA regulation postponed until April
The vote was meant to happen in February.
Republican Lawmakers Push Crypto Regulation with New House Subcommittee
Congressman Patrick McHenry wants to establish “clear rules of the road among federal regulators.”
Binance approved to offer crypto services to Swedish customers
The decision from Sweden’s financial authority followed regulators in France, Bahrain, Spain and Dubai granting similar approvals for Binance in 2022.
💰 Funding & Exits
Framework Ventures leads Parfin’s $15 million raise to provide web3 rails in LatAm
Framework Ventures backs web3 infrastructure provider Parfin's $15 million raise to push into the Latin America region.
Web3 Studio Sortium Raises $7.8M in Seed Round
Crypto hedge fund Arca was among the participants in the funding round.
Animoca Brands Japan invests in Psychic VR Lab
Animoca Brands announced that it made a strategic investment of JP¥100 million into Psychic VR Lab’s JP¥1 billion fundraising round in December 2022.
Crypto market maker CyberX raises $15 million led by Foresight Ventures
Crypto investment firm Foresight Ventures led a $15 million Series A round into digital asset market maker CyberX.
Quantum Temple Raises $2 Million in Pre-Seed
Quantum Temple, the Web3 platform dedicated to preserving cultural heritage, has announced $2 million in pre-seed funding led by Borderless Capital.
Exactly Protocol raises $2 Million in funding and launches on Ethereum Mainnet
Leading this fundraising round were web3 pioneers such as Kain Warwick, founder of Synthetix, Daedalus, a web3 angel collective, and Esteban Ordano, co-founder of Decentraland. Other investors included Bodhi Ventures, Newtopia, NXTP Ventures, and Kaszek Ventures.
🚀 Project Launches & Updates
Gaming Blockchain Oasys Launches Ecosystem Fund to Drive Adoption
The initiative aims to enable newcomers in the blockchain gaming sphere to serve users’ needs better.
Abu Dhabi-based Venom Foundation launches $1B fund for Web3 and blockchain
Abu Dhabi-based blockchain platform Venom Foundation and investment manager Iceberg Capital announced they will allocate $1 billion of funding to Web3 and blockchain firms through a new partnership.
MetaMask Staking beta now live with Lido and Rocket Pool, ConsenSys says
The service lets users connect to Lido and Rocket Pool and stake ETH to receive liquid staking tokens directly from the staking providers.
🔥 Other Bits We're Excited About
Australian Open 2023 Takes Swing at Roblox Metaverse
The tournament, which was last year exclusively hosted on Decentraland’s platform, will be branching out to other non-blockchain-based metaverses.
Iran and Russia want to issue new stablecoin backed by gold
]The potential stablecoin aims to enable cross-border transactions instead of fiat currencies like the U.S. dollar, the Russian ruble or the Iranian rial.