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Forbes
14 hours ago
- Business
- Forbes
Inside Robinhood's Crypto-Fueled Plan For World Domination
C rypto financiers might seem unlikely guests at the Château de la Croix des Gardes, a 25-acre Belle Époque villa commanding the Bay of Cannes from its hillside perch. Yet on a sun-drenched June afternoon, Robinhood commandeered the storied estate, famous for its star turn in Alfred Hitchcock's To Catch a Thief, for 'To Catch a Token'—a crypto field day conceived by longtime Côte d'Azur resident Johann Kerbrat, the firm's head of crypto. The spectacle opened with a cinematic flourish: a video of Robinhood cofounder and CEO Vlad Tenev driving a midnight-blue 1962 Jaguar E-Type convertible along the corniche, an homage to Cary Grant's entrance in Hitchcock's film. When the reel faded, Tenev stepped out in real time—decked out in a pinstriped white Tom Ford suit, black-and-white ascot, green attaché case in hand—to greet an invitation-only crowd of more than 300 that included Ethereum creator Vitalik Buterin and top brass from financial heavyweights JPMorgan, Mastercard and Stripe. The theatrics are warranted. Robinhood's stock is trading at $111 a share, an all-time high 384% above last year's levels, vaulting the brokerage firm's market cap to nearly $98 billion and into the ranks of the world's 250 most valuable companies. In 2024, it generated $1.4 billion in profit on nearly $3 billion in revenue and now holds $255 billion in assets, expanding at a 44% net deposit growth rate over the past year. In terms of active or funded accounts, Robinhood, with 26 million, is rapidly gaining share on Schwab, with 37 million, is three times larger than Morgan Stanley's E-Trade and six times larger than Merrill Lynch. Tenev's personal fortune has jumped sixfold in a year to $6.1 billion. Guerin Blask for Forbes The 38-year-old chief executive operates in perpetual motion. In late May, he is in Las Vegas, preaching to 35,000 bitcoiners about how crypto will further disrupt global finance through tokenization—the process of converting assets like stocks, bonds and real estate into digital tokens that can be traded 24/7 on blockchain networks. From there, he bounces to Tampa for a conference for registered investment advisors, and a few weeks later he's in Robinhood's posh Manhattan offices for its annual shareholder address. 'It's New York this week, then France, then the U.K.,' he rattles off before listing more than a dozen Robinhood offices across America, Europe and Asia. 'I have to visit each one at least once a year, and they just keep multiplying.' Despite his boyish looks, including a hair bob and goatee reminiscent of Errol Flynn's 1938 Robin Hood, Tenev these days sounds very much like the seasoned chief executive of a giant financial conglomerate. The upstart brokerage that blossomed from the ashes of the global financial crisis and Occupy Wall Street movement has grown up. It wants to be a one-stop financial firm for tech-native generations who prefer transacting digitally. Within the next 20 years, according to Cerulli Associates, they are expected to receive some $124 trillion in assets, mostly from their Boomer parents. A week before his staged entrance at the French estate, Tenev explained the method behind Robinhood's events. "The pace of rolling out new products has been pretty high,' he said. 'It's a good way to show to the world what we're doing. We have to figure out what story we're telling with each one, and it also really motivates people." MANDARIN ORIENTAL; ROBINHOOD The get-together at the Château marks Robinhood's first-ever international and crypto-focused event, dense with announcements. Starting in July, Robinhood is allowing European users to trade blockchain-based 'stock tokens,' nonvoting derivatives that track hundreds of U.S. stocks and ETFs, including privately owned tech juggernauts SpaceX and OpenAI. The trading will be commission-free, 24 hours a day, five days a week. For U.S. customers, crypto staking—the practice of locking digital assets to blockchain networks like Ethereum or Solana to earn income—will finally be permitted. Robinhood's June acquisition of Luxembourg-based crypto exchange Bitstamp for $200 million will unlock perpetual futures with no expiration on bitcoin and ether for continental customers. To underpin it all, Robinhood is building its own blockchain. 'We as an industry find ourselves at an important precipice,' Tenev told the VIPs fanning away the Riviera heat. 'We have a chance to prove to the world what we've believed all along, that crypto is much more than a speculative asset. It has the potential to become the backbone of the global financial system. We are hoping to turn that from a possibility to an inevitability.' To understand the coup Tenev is planning, it helps to revisit Robinhood's turbulent past. In 2013, Tenev and his cofounder, Baiju Bhatt, two Stanford physics and math grads, saw a world ripe for disruption. After college, the two developed software for giant hedge funds whose high-frequency trading dominated Wall Street. It was a front row seat to these funds' nearly insatiable appetite for trading volume, which they were willing to pay for. Retail investors who were accustomed to paying commissions of, say, $10 or $25 per trade at brokerage firms like Charles Schwab, Fidelity and Merrill Lynch could be a great source of this volume. Tenev and Bhatt built a fun and easy-to-use mobile trading app for novice traders that eliminated account minimums and commissions because they knew hedge funds would pay them to execute their customers' trades. They then marketed their zero-commission platform under the slogan of democratizing investing and rolled it out with the fanfare of a new blockbuster video game. Before Robinhood even launched, its Apple app store waitlist swelled to nearly 1 million people. By September 2019, the incumbents—Charles Schwab, E-Trade, Fidelity, TD Ameritrade (acquired by Schwab in 2020) —eliminated their fees, cementing the upstart's approach as the new industry standard. The triumph, however, didn't last long. In early 2021, after trading on the app exploded thanks in part to pandemic lockdowns and millions of stimulus checks, Robinhood became the focus of a regulatory firestorm during the GameStop meme-stock trading frenzy. Spurred by the Reddit community WallStreetBets, GameStop's stock price soared dramatically—seemingly without regard to the dismal underlying financials. This unprecedented volatility triggered a massive collateral demand from Robinhood's clearinghouse, forcing Tenev to halt purchases of the stock on the platform. Cue user fury, Main Street vilification and congressional grillings, including questions over the suicide of a young Robinhood options trader. But rather than retreat, the GameStop trading debacle—which exposed how outdated, opaque and slow U.S. stock trading is—crystallized an idea Tenev had been mulling. 'Could we actually put stocks on blockchains?' he says. 'My belief was that the value would be in taking stocks 24/7.' Robinhood first tried to modernize legacy systems by partnering with alternative trading platforms like West Palm Beach–based Blue Ocean to extend trading hours. However, these efforts hit a wall. 'I didn't realize how difficult it would be to change these core infrastructure elements because so many things depend on them. Maybe that was a little bit naive,' Tenev admits. Meanwhile, his crypto chief, Kerbrat, was exploring other ways to execute his idea. With U.S. regulators taking a cautious stance on digital assets under the Biden administration, the team took the experiment to Europe, where a rulebook was already in place. 'Sometimes it's easier to start with new infrastructure and build it from the ground up. We believe the technology can scale to any jurisdiction, and over time we'll be able to figure out how to make it available everywhere in the world,' Tenev says, knowing his lucrative trading volume machine could grow exponentially as millions of investors worldwide start trading U.S. stocks like memecoins. While Kerbrat worked on tokenization in Europe, Robinhood was reinventing itself elsewhere. In March 2024, Bhatt, now worth $6.7 billion, exited the company (he stepped aside as co-CEO in 2020) to pursue a new venture in space-based solar energy. Despite lingering customer litigation from GameStop, Tenev was busy introducing a wave of new products—IRAs, high-yield savings accounts, a credit card offering 3% cash back (with 3 million people on the waitlist), a private banking service for cash delivery on demand and sophisticated options tools previously reserved for institutional investors—turning Robinhood into 'a mousetrap to trade anything,' in the words of Brett Knoblauch, managing director at Cantor Fitzgerald. The whirlwind of launches matches its architect's own cadence. In a moment of reflection, the Bulgaria-born Tenev lifts his palms in a what‑can‑you‑do shrug. 'I just wake up, work, eat, work out, go to sleep. My wife doesn't love it when I say this, but I actually prefer to integrate work into personal life as much as possible.' What Tenev says he didn't fully anticipate during Robinhood's explosive growth was how deeply accessible trading resonates with the entrepreneurial spirit. At a private event in Miami last year, the company's top users included not just self-taught day traders but small-business owners and startup founders—people who approach markets with the same DIY mindset that built their companies. This fiercely independent impulse, he believes, is Robinhood's real protective moat: 'Entrepreneurs don't trust other experts to do their stuff for them. They like to figure things out for themselves.' Robinhood is engineered for them—a control panel for those who want to manage their own money without gatekeepers. Tenev plans to dominate next-generation investors in three phases he calls 'arcs.' First, win the active trader market, where the ROI is immediate, as evidenced by Robinhood's current strong results. Medium-term, around five years, he wants to serve the entirety of his customers' wallets, from credit cards to crypto, mortgages and IRAs. Third arc: Build the number one global financial ecosystem, presumably with Robinhood's blockchain as its backbone. Says Tenev, prepping for the next day's shareholder meeting, 'This will be much larger than the first two arcs. The opportunities start slowly but compound over time.' T okenization may be Robinhood's long-term ambition, but its core crypto business is already a juggernaut. In 2024, its crypto revenue reached $626 million, up from $135 million a year earlier, accounting for more than one-third of total transaction-based revenue. In the first quarter of 2025, crypto revenue has already reached $252 million. 'They're eating Coinbase's lunch in the U.S. right now,' says Rob Hadick, general partner at crypto VC firm Dragonfly. In May 2025, Robinhood's crypto volume spiked 36% month-over-month while Coinbase's dipped, Cantor Fitzgerald's Knoblauch notes. Coinbase still owns the institutional market, he concedes ('their offering is much broader and custodial'), but Robinhood's takeover of Bitstamp, finalized in June, handed it 5,000 institutional accounts and additional licenses in Europe and Asia. Tenev and Kerbrat insist Robinhood's approach is fundamentally different from that of crypto exchanges like Coinbase. 'In this industry people talk to you about the advantage of this [blockchain] layer versus this layer and just forget at the end of the day about the end user. We don't want to build a technology just to talk about the technology. We want to build something that people can use on the day-to-day and actually see the advantage compared to the alternative financial system,' Kerbrat says. Micky Malka, founder of Ribbit Capital and an early backer of Robinhood, Coinbase and their European competitor Revolut, says focusing on the Coinbase-Robinhood rivalry is shortsighted. 'To me, the question for the next ten years is how much market share they take from the incumbents. It's not a fight amongst them,' he says. Knoblauch estimates Robinhood's $255 billion in assets under custody will rival Interactive Brokers', which has $665 billion in client assets, within seven years. Next up, Charles Schwab, which the analyst calculates Robinhood has gained share on for 14 straight months. Tenev is also serious about diversifying. The old Robinhood was criticized for being a payment for order flow (PFOF) junkie, dependent on heavy trading volume and the most aggressive Wall Street hedge funds. Transactions still account for 56% of its revenue (down from 77% in 2021), but today Robinhood has ten business lines on track to each generate over $100 million in revenue within two years, according to John Todaro, managing director at Needham & Company. Take Robinhood Gold. What began as a simple $5 per month or $50 per year premium service, offering margin access, professional research and a little extra yield on balances, has evolved into the centerpiece of Tenev's powerful subscription model. Among its current perks: 4% yields on brokerage cash, interest-free margin loans up to $1,000 and a 3% match on IRA contributions. The newly released Robinhood Gold credit card, which offers 3% cash back on all purchases, was just sent to the first 200,000 customers. 'If they get to 15 million users on Gold, you're looking at close to a billion dollars of subscription revenue. It's taking a business that used to be very cyclical to having recurring revenue, then diversifying the overall revenue base,' Knoblauch says. Then there's Robinhood Strategies, Tenev's new hybrid robo-human advisory product gunning for old-school stalwarts like Morgan Stanley and Merrill Lynch in the $60 trillion U.S. wealth management business. For a 0.25% annual management fee, capped at a flat $250 for Robinhood Gold members, customers get tailored portfolios of stocks and ETFs, algorithmically managed and rebalanced with human oversight. Since launching in March, this disruptive new platform has already brought in $350 million. Tenev describes his company's approach to new products as scientific, empowering small teams inside Robinhood to test hypotheses with customers who provide immediate feedback to its initiatives on social networks. 'A lot of companies will just look at what's happening in the outside world and copy it, sort of a competitive benchmarking. When we launch products or new features, we do it because we like to figure stuff out,' Tenev says. Robinhood's recent launch of home mortgages—currently at 6.1% for 30-year fixed plus $500 toward closing costs—is the result of a stealth online pilot it ran starting in June. 'It went all over social media. Then I acknowledged we were running the pilot in a tweet. It was probably one of my most viral tweets of the year.' T enev's tokenization push is a bit of a moonshot, and Europe, which has already adopted many of the crypto road rules still being debated in Congress, is Robinhood's lab. 'The experiment that we're running in Europe is, What would Robinhood look like if it was rebuilt from the ground up entirely on crypto rails? Then we'll see what the pros and cons are and bring the best of that EU app to the U.S. and the rest of the world,' he says. So far the tokenization of stocks is minuscule. xStocks, a new but already leading platform from Switzerland's Backed Finance, has tokenized more than 60 listed equities, including household names such as Apple and Amazon, and made them available on large crypto exchanges like Kraken and Bybit. xStocks has less than $10 million in daily volume. Structural issues abound: These tokens are derivatives backed by assets held off-chain, which means routine corporate actions like dividends, stock splits or other things that might occur over a weekend, when markets are closed, could scramble collateral calculations and risk unintended liquidations. 'Some market maker has to take that risk, and how will they hedge that risk when there is no market open? If they're going to take that risk, they need to blow their spreads and charge people a lot of money,' says Dragonfly's Hadick. 'The infrastructure is not there at the moment on the off-chain side, and the on-chain product is not there yet. . . . I'm worried these initial products are going to be essentially duds.' This hasn't stopped others from jumping in. In June, the Winklevoss twins' Gemini launched tokenized trading with MicroStrategy shares for its EU customers. Coinbase is reportedly seeking SEC approval to offer tokenized stocks, and even Larry Fink, CEO of $12.5 trillion (assets under management) BlackRock, is urging the SEC to approve tokenization of stocks and bonds. Robinhood is going further. Besides public stocks, it's tokenizing private companies and has already announced tokenized shares of OpenAI and SpaceX, each valued at more than $300 billion today. OpenAI has already publicly disavowed Robinhood's product, emphasizing the tokens are not authorized or recognized by the company. 'Nobody, no founder, wants their equity floating around on-chain with holders they don't know,' Hadick warns. Tenev is a weathered veteran when it comes to facing naysayers. 'It's still a little crufty,' he admits, using pejorative coder slang for unnecessarily complex software. 'I don't think the brokers want to make it easy for us to pull their stocks out. But what happens when it becomes self-custody? When you can tokenize and self-custody, you can be independent of the brokerage infrastructure—the same way you can load a crypto wallet on MetaMask, Robinhood or Coinbase, you'll be able to seamlessly use any interface to hold your stocks and trade them in pretty much all instances.' T his is precisely why Tenev is obsessed with making Robinhood his young customers' sole tool for all things related to money. When it comes to retail financial services, inertia is second in power only to compound interest. Customers are inherently sticky, but Tenev knows that the old giants of the financial world, including Fidelity, Schwab and Merrill Lynch, are vulnerable as trillions in Boomer assets are bequeathed to their digital-native offspring. In fact, he thinks his biggest competition will come not from firms like Coinbase or Fidelity but from the Anthropics and OpenAIs of the world: 'They're the ones moving the fastest and doing the most interesting stuff. Though I would say it's too early to proclaim the financial industry being disrupted by ChatGPT.' Early Robinhood investor Malka, whom Tenev calls his mentor and whose firm has already profited on its stake by more than $5 billion by Forbes' estimates, is an unabashed Tenev fanboy. 'Robinhood has a leader who's not even 40, who is extremely AI-native, understands where AI goes, understands tokenization, and he's leveraging those two strategies like very few can,' he says. 'We're just starting to get the right setup to bring the 'internet moment' of money, where anybody in the world can save in the same product. Loans are going to get cheaper because credit underwriting is going to get better. All those things.' Tenev believes Robinhood will ultimately employ AI agents to replicate and improve on the services of high-net-worth family offices, putting a 'family office in your pocket.' AI is so central to Tenev's vision that the former math Ph.D. candidate couldn't resist recently cofounding and becoming chairman of AI startup Harmonic, which he leads with computer scientist Tudor Achim, who previously led autonomous driving startup In July, Harmonic raised $100 million in Series B funding from Kleiner Perkins, Paradigm and Sequoia, valuing it at $875 million. The 'mathematical superintelligence' lab is building an advanced reasoning engine, one that 'guarantees accuracy and eliminates hallucinations.' No doubt a useful feature in the coming age of AI and money. 'It would be pretty amazing to solve the Riemann hypothesis, or one of the other big Millennium problems, on a mobile app,' muses Tenev, referring to the most profound unanswered mathematical questions. 'Rather than observing that, I hope to be actively participating.' Jamie Dimon, Larry Fink and Ken Griffin, take note. More from Forbes Forbes Vibe Coding Turned This Swedish AI Unicorn Into The Fastest Growing Software Startup Ever By Iain Martin Forbes Go Back To The Office, But Bring Your Own Snacks. Blame Congress. By Kelly Phillips Erb Forbes The Best Places To Retire Abroad In 2025 By William P. Barrett Forbes Inside America's Top Small Business Bank By Brandon Kochkodin Forbes You're Not Imagining It: AI Is Already Taking Tech Jobs By Richard Nieva
Yahoo
21 hours ago
- Business
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The Roman Storm Tornado Cash Trial Explained
The Roman Storm Tornado Cash Trial Explained originally appeared on TheStreet. Tornado Cash founder Roman Storm is currently battling with the U.S. government in a heated courtroom trial to avoid decades in prison time. And unlike other high-profile crypto defendants, Storm has attracted a support from a powerful contingent, including the Ethereum Foundation and Ethereum co-founder Vitalik Buterin himself. Raising more than $3 million dollars and counting, Storm and his defense team are putting up a serious fight as they now take over the floor to present to the jury their side of the case in the second half of the trial. Coinage headed down to the New York courtroom this week to uncover what makes the trial of Roman Storm so unique — and why it's arguably the most important trial for crypto yet. First off, this isn't a case centering on simple fraud for once. It's not as clear cut as the trial of FTX founder Sam Bankman-Fried, nor Celsius founder Alex Mashinsky — which prosecutors easily navigated to demonstrate to jurors those founders harmed customers. Instead, in the case of Roman Storm, the government is going after a crypto founder for the tool he built to let users protect their privacy on the blockchain. Tornado Cash was a money mixer Storm and his co-founders launched in 2019. It allowed anyone to deposit crypto from a public address, pooled those assets, and then let users withdraw on the other end to a fresh wallet without anyone being able to trace whose funds were whose. Proponents said it restored much needed privacy for transactions onchain. Critics said it was a blatant money laundering tool. That distinction might not matter if it's just a few thousand users making small-time transactions in the low double-digit figures. But when North Korea's elite hacking team the Lazarus Group started used Tornado Cash to launder some of the more than $600 million it stole in one of the largest crypto hacks of all-time? Yeah, the government started to care. The reason for that is because the U.S. has a lot of rules around who you can do business with. Particularly for financial players, they typically follow these rules because the penalties of not doing so are extreme. Not only can fines be in the billions of dollars for banks who don't block drug traffickers or other state-sanctioned actors, they could be supporting regimes the U.S. is actively working against. Perhaps it's no surprise then that the government brought this case against Storm, hitting him with a trio of charges — including conspiracy to commit money laundering, conspiracy to operate an unlicensed money transferring business, and conspiracy to violate the International Emergency Economic Powers Act (the law that makes it illegal to work with America's sanctioned enemies like North Korea.) But from a use case perspective, it's hard to argue something like Tornado Cash isn't needed to protect privacy onchain. Even your credit card transactions aren't publicly broadcast to everyone around the world — and as crypto kidnappings continue to rise, it doesn't really seem safe letting everyone know exactly how much wealth you're sitting on. It's also why the idea for Tornado Cash came directly from Ethereum co-founder Vitalik Buterin himself. He and Storm chatted about the idea of privacy onchain at a conference in New York before Storm and his co-founders launched the project — and indeed since, Ethereum's future roadmap has become chock-full with upcoming privacy features. Perhaps it's obvious, then, why this case matters to so many in the Ethereum community. The reason for that is not just privacy — but also the inner workings of how the U.S. government has gone about prosecuting this case. They are going after Storm for running an unlicensed money transferring business. But, importantly, Tornado Cash as a service never technically took direct custody of users' funds. Their immutable smart contracts merely facilitated users to take these actions themselves, if they so chose. But as a crypto journalist who has seen plenty of these defenses that lean heavily on a firm understanding of a narrow reading of the law and the technology at play, I'm not sure the crypto community should be so optimistic. That is, the government usually does a very good job of making someone look guilty — and they usually don't pursue cases they think they will lose. As I sat in the courtroom this week, I saw that playing out yet again. The prosecutors read through the same conversations they highlighted in their earlier indictment. They highlighted the purposefully unsuccessful attempts by Storm and his co-founders to block North Korea's sanctioned wallet from interacting with their website's front end, only to leave access to the money mixing smart contract elsewhere completely wide open. But that's the thing about immutable smart contracts like Tornado Cash. Once built, it's very hard to stop bad actors from using it. The government's case is that Storm probably should have thought of those consequences before building Tornado Cash. Or, perhaps, should've definitely done more once he and his co-founders became aware that the overwhelming majority of activity on their tool had mostly become North Korea laundering stolen funds. But those in crypto are quick to point out that that is simply not how permissionless systems or smart contracts work. Regardless, if Storm wins his case, the 'privacy above all else' narrative may severely undermine America's ability to enforce its financial leverage on bad actors and make enforcing sanctions nearly impossible. It's also why the question posed to Roman Storm by crypto journalist Eleanor Terrett on the Crypto in America podcast was such a good one. Terrett asked Storm before the trial began point blank: 'Do you believe the right to privacy outweighs concerns about national security?' Storm answered: 'My personal beliefs I don't think matter much at this point. I only believe that developers should freely write code without consequences for misusage by third parties.' Currently Coinage Media is running an onchain DAO poll for members to have their voice heard on how they would rule in the case. As for the real trial, jurors could be asked to deliver a verdict as soon as this coming week as the trial wraps up in New York. The Roman Storm Tornado Cash Trial Explained first appeared on TheStreet on Jul 28, 2025 This story was originally reported by TheStreet on Jul 28, 2025, where it first appeared.
Yahoo
a day ago
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Ethereum Turns 10 — Time to Leave the Trilemma Behind
Decentralized systems like the electric grid and the World Wide Web scaled by solving communication bottlenecks. Blockchains, a triumph of decentralized design, should follow the same pattern, but early technical constraints caused many to equate decentralization with inefficiency and sluggish performance. As Ethereum turns 10 this July, it's evolved from a developer playground into the backbone of onchain finance. As institutions like BlackRock and Franklin Templeton launch tokenized funds, and banks roll out stablecoins, the question now is whether it can scale to meet global demand—where heavy workloads and millisecond-level response times matter. For all this evolution, one assumption still lingers: that blockchains must trade off between decentralization, scalability, and security. This 'blockchain trilemma' has shaped protocol design since Ethereum's genesis block. The trilemma isn't a law of physics; it's a design problem we're finally learning how to solve. Lay of the Land on Scalable Blockchains Ethereum co-founder Vitalik Buterin identified three properties for blockchain performance: decentralization (many autonomous nodes), security (resilience to malicious acts), and scalability (transaction speed). He introduced the 'Blockchain Trilemma,' suggesting that enhancing two typically weakens the third, especially scalability. This framing shaped Ethereum's path: the ecosystem prioritized decentralization and security, building for robustness and fault tolerance across thousands of nodes. But performance has lagged, with delays in block propagation, consensus, and finality. To maintain decentralization while scaling, some protocols on Ethereum reduce validator participation or shard network responsibilities; Optimistic Rollups, shift execution off-chain and rely on fraud proofs to maintain integrity; Layer-2 designs aim to compress thousands of transactions into a single one committed to the main chain, offloading scalability pressure but introducing dependencies on trusted nodes. Security remains paramount, as financial stakes rise. Failures stem from downtime, collusion, or message propagation errors, causing consensus to halt or double-spend. Yet most scaling relies on best-effort performance rather than protocol-level guarantees. Validators are incentivized to boost computing power or rely on fast networks, but lack guarantees that transactions will complete. This raises important questions for Ethereum and the industry: Can we be confident that every transaction will finalize under load? Are probabilistic approaches enough to support global-scale applications? As Ethereum enters its second decade, answering these questions will be crucial for developers, institutions and billions of end users relying on blockchains to deliver. Decentralization as a Strength, Not a Limitation Decentralization was never the cause of sluggish UX on Ethereum, network coordination was. With the right engineering, decentralization becomes a performance advantage and a catalyst to scale. It feels intuitive that a centralized command center would outperform a fully distributed one. How could it not be better to have an omniscient controller overseeing the network? This is precisely where we would like to demystify belief started decades ago in Professor Medard's lab at MIT, to make decentralized communication systems provably optimal. Today, with Random Linear Network Coding (RLNC), that vision is finally implementable at scale. Let's get technical. To address scalability, we must first understand where latency occurs: in blockchain systems, each node must observe the same operations in the same order to observe the same sequence of state changes starting from the initial state. This requires consensus—a process where all nodes agree on a single proposed value. Blockchains like Ethereum and Solana, use leader-based consensus with predetermined time slots in which nodes must come to agreement, let's call it let's call it 'D'. Pick D too large and finality slows down; pick it too small and consensus fails; this creates a persistent tradeoff in performance. In Ethereum's consensus algorithm each node attempts to communicate its local value to the others, through a series of message exchanges via Gossip propagation. But due to network perturbations, such as congestion, bottlenecks, buffer overflow; some messages may be lost or delayed and some may be duplicated. Such incidents increase the time for information propagation and hence, reaching consensus inevitably results in large D slots, especially in larger networks. To scale, many blockchains limit decentralization. These blockchains require attestation from a certain threshold of participants, such as two-thirds of the stakes, for each consensus round. To achieve scalability, we need to improve the efficiency of message dissemination. With Random Network Linear Coding (RLNC), we aim to enhance the scalability of the protocol, directly addressing the constraints imposed by current implementations. Decentralize to Scale: The Power of RLNC Random Linear Network Coding (RLNC) is different from traditional network codes. It is stateless, algebraic, and entirely decentralized. Instead of trying to micromanage traffic, every node mixes coded messages independently; yet achieves optimal results, as if a central controller were orchestrating the network. It has been proven mathematically that no centralized scheduler would outperform this method. That's not common in system design, and it is what makes this approach so powerful. Instead of relaying raw messages, RLNC-enabled nodes divide and transmit message data into coded elements using algebraic equations over finite fields. RLNC allows nodes to recover the original message using only a subset of these coded pieces; there's no need for every message to arrive. It also avoids duplication by letting each node mix what it receives into new, unique linear combinations on the fly. This makes every exchange more informative and resilient to network delays or losses. With Ethereum validators now testing RLNC through OptimumP2P — including Kiln, and Everstake — this shift is no longer hypothetical. It's already in motion. Up next, RLNC-powered architectures and pub-sub protocols will plug into other existing blockchains helping them scale with higher throughput and lower latency. A Call for a New Industry Benchmark If Ethereum is to serve as the foundation of global finance in its second decade, it must move beyond outdated assumptions. Its future won't be defined by tradeoffs, but by provable performance. The trilemma isn't a law of nature, it's a limitation of old design, one that we now have the power to overcome. To meet the demands of real-world adoption, we need systems designed with scalability as a first-class principle, backed by provable performance guarantees, not tradeoffs. RLNC offers a path forward. With mathematically grounded throughput guarantees in decentralized environments, it's a promising foundation for a more performant, responsive in to access your portfolio
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4 days ago
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Storm defense eyes mistrial, citing testimony from Tornado Cash ‘victim'
Attorneys for Tornado Cash co-founder Roman Storm might move for a mistrial after learning prosecutors called a witness with a tenuous connection to the controversial crypto protocol. If the request were granted, Storm's criminal trial would end, though prosecutors could choose to retry the case with a new jury. It is a dramatic turn of events in a closely-watched trial entering its second week. Storm has been charged with conspiracy to launder money, operate an unlicensed money-transmitting business, and violate US sanctions. He faces 45 years in prison. Crypto proponents say a guilty verdict could have a chilling effect on the development of privacy preserving software and decentralised finance. Storm has raised millions for his defence from prominent donors including Ethereum co-founder Vitalik Buterin. On Monday, David Patton, one of the attorneys for Storm, questioned the testimony of the government's first witness: Hanfeng Lin, a Taiwanese woman living in Georgia. Lin recounted falling for a so-called pig butchering scam in 2021. A 'crypto recovery service' she hired in 2022 told her some of the stolen crypto was laundered through Tornado Cash. Prosecutors have said her testimony would prove that illicit funds were deposited in Tornado Cash and explain her decision to reach out to the protocol's co-founders, thereby alerting them to the fact it was being misused. But weekend research from the defence team suggested Lin's money never went to Tornado Cash, Patton said on Monday. 'They called a very sympathetic alleged victim who, from our research over the weekend, we can't find a connection between her funds and Tornado Cash,' he said. If so, 'she has utterly no relevance,' Patton continued. He told Judge Katherine Polk Failla he would ask to strike Lin's testimony and might go so far as to move for a mistrial. Storm's defence raised the issue days after crypto security researcher Taylor Monahan assailed the government's decision to call Lin to the witness stand for the very same reason. Monahan said she was unable to find evidence Lin's crypto ever went to Tornado Cash. On Monday, pseudonymous crypto sleuth ZachXBT endorsed her analysis. But prosecutors are standing by Lin's testimony. On Monday, Assistant US Attorney Than Rehn said the government had just filed evidence demonstrating Lin's crypto did, in fact, end up in Tornado Cash. A forthcoming government witness would help prove that point, he added. Storm's trial began on Monday. It is expected to last three weeks. Aleks Gilbert is DL News' New York-based DeFi correspondent. You can reach him at aleks@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
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7 days ago
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- Yahoo
Ethereum Validators Signal Intention of Upping Gas Limit To 45M
Ethereum co-founder Vitalik Buterin said Sunday that nearly the majority of validators with staked ETH running the blockchain have signaled intent to increase the gas limit, allowing for more transaction throughput on the blockchain. According to the dashboard as of July 21, 2025, 49% of validators' staked ETH have indicated that they are in favor of upping the gas limit to reach 45 million units. On Ethereum, gas is the unit that measures the computational work required to execute transactions or smart contracts. Whenever a user interacts with the blockchain, they must pay a gas fee, which covers the cost of using Ethereum's computing resources. This ensures users pay in proportion to the complexity of their actions. Each block on Ethereum has a gas limit, which is the maximum amount of gas that can be consumed by all transactions in that block. If the total gas needed by pending transactions exceeds the block's limit, some transactions are postponed to future blocks. Because space is limited, transactions compete for inclusion, and those offering higher fees are more likely to be included first. The move to bring the gas limit up to 45 million comes as Ethereum's native token (ETH) broke through $3800 over the weekend and large institutions have deployed capital to use the blockchain for infrastructure and for other financial applications. The gas limit was previously raised in February, when it was set to 36 million. It was the first time since 2021 that it had been raised, after more than half of the validators on the network supported the change, without needing a hard fork. While Ethereum core developers are keen to scale the blockchain to include more transactions, they are not stopping at this limit. 'We're targeting 45 million for now, with a plan for higher soon after', said Parithosh Jayanthri, a DevOps Engineer at the Ethereum Foundation, in a message to CoinDesk. 'There's a lot planned for the next few years.' Read more: Ethereum Raises Gas Limits for First Time Since 2021, Boosting ETH Appeal
