Welcome to The Protocol, your weekly digest of the most significant happenings in cryptocurrency technology development. I’m Ben Schiller, CoinDesk’s Opinion and Features Editor.
In this edition, we cover:
– Movement Labs unveils its developer mainnet
– Cardano transitions to decentralized governance
– SSV DAO introduces SSC 2.0
– Elon Musk advocates for blockchain in government
Major Updates in Blockchain Technology
Movement Labs Launches Developer Mainnet
Blockchain company Movement Labs has officially rolled out its developer mainnet, a significant step towards integrating Facebook’s Move Virtual Machine (MoveVM) with the Ethereum ecosystem. This launch marks the beginning of the deployment of Movement’s core infrastructure, which will enable select partners to start developing decentralized finance (DeFi) protocols.
The development comes in the wake of Movement’s initial mainnet launch in December and is set to precede a public mainnet beta release scheduled for next month. The Move technology originated from Facebook’s now-defunct digital currency project, Diem, which was abandoned in early 2022. The MoveVM has also been instrumental in the creation of the Sui and Aptos layer-1 networks.
Backed by a substantial $38 million Series A funding round led by Polychain Capital, Movement Labs is pioneering the expansion of the Move programming language to an Ethereum layer 2 for the very first time. Alongside the public mainnet launch, the company plans to introduce a multi-asset liquidity program designed to serve as a foundation for future DeFi applications.
Cardano Shifts to Decentralized Governance
In another exciting development, Cardano is set to transition to a fully decentralized governance model following the implementation of the Plomin hard fork on January 29. The Cardano Foundation, a non-profit organization supporting the project, announced that this hard fork will grant ADA token holders genuine voting power on crucial matters such as parameter changes, treasury withdrawals, and the overall direction of the blockchain.
As of now, Cardano’s ADA token is trading at approximately 93 cents, reflecting a 1.4% increase on the day. A hard fork represents a significant, non-backwards compatible change to the blockchain’s code, and the successful implementation of the Plomin hard fork requires Stake Pool Operators to upgrade their nodes and achieve a 51% agreement on the upgrade. Impressively, nearly 80% of nodes have already upgraded to the new version.
SSV DAO Unveils SSV 2.0 Framework
The SSV DAO, the decentralized autonomous organization behind the SSV Network, has introduced an innovative framework known as “SSV 2.0.” This new development allows applications to utilize “based” technology by leveraging Ethereum validators. According to a press release, SSV 2.0 is poised to be the most ambitious project for the SSV Network, introducing “based applications” (bApps) to the Ethereum ecosystem.
“Based” applications, particularly “based rollups,” are emerging as a groundbreaking technology that enhances interoperability and bolsters the security of networks built on Ethereum. By utilizing layer-1 validators for execution and security instead of centralized sequencers, these applications mitigate risks associated with single points of failure. As Ethereum developers explore solutions to the fragmentation caused by the proliferation of layer-2 networks, the SSV Network’s focus on “based” technology could pave the way for a more cohesive Ethereum environment.
Elon Musk Champions Blockchain in Governance
In an intriguing development, Elon Musk, in his role as head of the newly established Department for Government Efficiency (D.O.G.E.), is advocating for the use of blockchain technology as a cost-effective method to track federal spending, secure data, process payments, and manage government buildings. Sources indicate that representatives from various public blockchains have engaged in discussions with affiliates of D.O.G.E.
The creation of this department comes in response to the federal government’s projected spending of $6.7 trillion for fiscal 2024, which Musk has criticized as “wasted” money. He aims to reduce this figure to a maximum of $2 trillion. The department’s name, a playful nod to Musk’s favorite cryptocurrency, Dogecoin (DOGE), aligns with ongoing efforts to establish crypto-friendly policies in the United States. Alongside the establishment of D.O.G.E., former President Trump has signed an executive order to form a working group on digital assets, tasked with identifying existing regulations affecting cryptocurrencies.
Market Insights and Regulatory Updates
XRP and National Crypto Reserve Debate
Ripple CEO Brad Garlinghouse has sparked a conversation regarding the concept of a national cryptocurrency reserve. He asserts that such a reserve should be representative of the entire industry rather than favoring a single token, whether it be Bitcoin, XRP, or another cryptocurrency. Meanwhile, proponents of Bitcoin hope to see a reserve dedicated solely to their asset.
AI Token Impact from DeepSeek Launch
The launch of DeepSeek, China’s response to ChatGPT, has led to a decline in prices for various AI tokens, triggering discussions about the effects of emerging AI technologies on the cryptocurrency market.
Regulatory Developments
The Electronic Frontier Foundation has called for the dismissal of a long-standing case involving Tornado Cash, which pits the developers of the mixer software against the U.S. government, raising important questions about regulation and privacy in the crypto space.
Upcoming Events in the Crypto Calendar
– **Jan. 30-31**: PLAN B Forum, San Salvador, El Salvador
– **Feb. 1-6**: Satoshi Roundtable, Dubai
– **Feb. 19-20, 2025**: ConsensusHK, Hong Kong
– **Feb. 23-24**: NFT Paris
– **Feb. 23 – March 2**: ETHDenver
– **March 18-19**: Digital Asset Summit, London
– **May 14-16**: Consensus, Toronto
– **May 27-29**: Bitcoin 2025, Las Vegas
Stay tuned for more updates in the world of cryptocurrency technology and development!
