Welcome to The Protocol, CoinDesk’s weekly digest highlighting the most significant developments in cryptocurrency technology. I’m Margaux Nijkerk, your guide to the latest happenings in the Ethereum ecosystem.
In this edition:
- Ethereum’s Holesky Testnet Achieves Finality
- Starknet Expands to Bitcoin and Ethereum
- Danny Ryan’s Transition from Ethereum to Wall Street
- Japanese Tech Titans Sony and LINE Collaborate
This article is part of our weekly newsletter, The Protocol, which delves into the technology driving the crypto space. Subscribe here to receive it every Wednesday.
Ethereum’s Holesky Testnet Reaches Critical Milestone
After a prolonged wait, Ethereum’s Holesky testnet has achieved finality nearly two weeks post the Pectra upgrade, successfully resolving a client-software configuration bug that had hindered progress since February 24. This significant milestone comes at a time when Ethereum developers are contemplating the timing for Pectra’s mainnet launch, thereby postponing this much-anticipated upgrade. This finalization marks a crucial step forward for the Ethereum network, illustrating the resilience and adaptability of its development team. — Shaurya Malwa
Starknet’s Bold Move into Bitcoin Territory
Starknet, a prominent project dedicated to enhancing Ethereum’s transaction speed, is set to expand its reach to Bitcoin. In collaboration with BTC wallet provider Xverse, Starknet aims to deliver a comprehensive decentralized finance (DeFi) experience to Bitcoin users. The partnership is expected to facilitate Bitcoin’s DeFi evolution by integrating Starknet’s capabilities in Q2 2025. Starknet’s newly released Bitcoin Roadmap outlines its intention to remain operational on Ethereum while evolving into Bitcoin’s execution layer, targeting scalability from 13 transactions per second to thousands. This ambitious project seeks to leverage Bitcoin’s robust security and reserves to empower the broader DeFi ecosystem, tackling the challenges posed by Bitcoin’s limited programmability compared to Ethereum. — Jamie Crawley
Danny Ryan’s New Venture: Bridging Ethereum and Wall Street
Danny Ryan, a former key researcher at the Ethereum Foundation, has embarked on a new journey after a brief departure from the organization. Following talks to rejoin the foundation, Ryan mutually parted ways with them in January, later announcing his affiliation with Etherealize, an initiative focused on connecting Ethereum with Wall Street. In an insightful interview, Ryan expressed his belief that Ethereum is at a pivotal technological moment, emphasizing that the future of Ethereum transcends the foundation’s changes. He stated, “Ethereum is much bigger than the EF.” — Margaux Nijkerk
Collaboration Between Japanese Giants Sony and LINE
In a significant move towards Web3, Sony’s blockchain division is partnering with the popular Japanese social media platform LINE. This collaboration aims to adapt several of LINE’s popular mini-apps onto Sony’s Soeneium network, which was launched in January. LINE boasts approximately 200 million active users, and the integration will introduce four LINE-based games—Sleepagotchi, Farm Frens, Puffy Match, and Pocket Mob—into the Soeneium ecosystem. This partnership is designed to enhance user engagement through in-game rewards and purchases, facilitating a smoother transition for Web2 users into the Web3 landscape. Soeneium operates as a layer-2 solution on Ethereum, utilizing Optimism’s OP Stack technology. — Margaux Nijkerk
In Other Noteworthy Developments
In a significant legislative win for decentralized finance (DeFi), the U.S. House of Representatives voted against an IRS rule that would have imposed stringent information collection requirements on decentralized entities. This decision, supported by a bipartisan coalition including 71 Democrats, is seen as a major victory for the DeFi community. — Nik De
Meanwhile, the anticipation for new crypto exchange-traded funds (ETFs) in the U.S. continues, with applications submitted for various cryptocurrencies, including XRP, Solana, Dogecoin, and Litecoin. However, decisions on these applications are unlikely to be made until President Trump’s pick to lead the agency, Paul Atkins, is confirmed by the Senate, with no hearings scheduled as of yet. — Helene Braun
In a notable regulatory update, The Office of the Comptroller of the Currency (OCC) announced that federally regulated banks can now engage in a range of cryptocurrency activities without needing prior approval. Additionally, the OCC has rescinded a requirement for banks to report liquidity risks associated with cryptocurrencies, marking a positive shift for the crypto sector. — Sam Reynolds
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