Latest news with #DeFi
Yahoo
an hour ago
- Business
- Yahoo
Why 'Expensive' Ethereum Will Dominate Institutional DeFi
With over 100 layer-2 (L2) blockchains, you're excused for thinking Ethereum is too expensive and too slow. But ask any institution preparing to settle a $500 million interest rate swap where they'll build, and the answer is Ethereum. The reason reveals everything about how institutional DeFi is likely to develop. The metrics that matter for institutional adoption are entirely different to retail. While retail users flee Ethereum's transaction fees for cheaper chains, institutions will gladly pay that premium for security when moving hundreds of millions. The premium that people are willing to pay for a safe infrastructure is not an issue. Ethereum's 'weaknesses' are actually its institutional moat. A tale of two markets Examining the numbers, the difference in perspective between retail and institutional investors makes sense. If you are buying a memecoin for $50, you don't want to pay $10 in transaction fees. But when it comes to settling a $500 million interest rate swap, shelling out $10 to ensure a secure transaction is a small price for that peace of mind. One needs to look no further than TradFi to see this perspective is not new, and the security premium to transact on Ethereum is actually the product. There's a reason why institutions pay more to trade on the NYSE than the Pink Sheets (securities on OTC exchanges), and why they continue to transact through SWIFT, despite its costs. It's all about legitimacy and a proven track record of conducting transactions in a secure and compliant manner. The same will apply to blockchains. The idea of having hundreds of millions of dollars in funds stuck on an inoperable network is the definition of a nightmare for institutions. Many institutions value the battle-tested security of chains like Ethereum rather than ones that focus on speed. If you take one thing away from this op-ed, understand that traditional finance always pays for infrastructure reliability. Preparing for regulations What investors need most is a robust, market tested base-layer blockchain that is widely accepted among financial institutions as a neutral settlement layer. Ethereum gets serious institutional engagement because the network is properly integrated with existing infrastructure. It's what it was built for. One proof point is the number of major banks building on Ethereum, who get regulatory comfort with Ethereum's decentralization, as well as from the pool of developer talent that has been, and will continue to be, concentrated within the Ethereum ecosystem. This just might be a self-reinforcing cycle of institutional adoption. A feature, not a failure We need to stop seeing Ethereum's high fees as a failure – they're a feature that naturally segments the market. Some chains are intentionally optimized for low cost, fast, micro transactions. Institutions need, and will pay for, the digital equivalent of Fort Knox for large ones, where liquidity is available. Instead of looking at metrics like daily active users or translation counts, institutions are taking a more fundamental approach. They are watching where regulated entities are building their infrastructure, and are focused on the big game of institutional settlement. So the next time someone declares Ethereum dead, ask them where they would rather settle a $500 million transaction? The answer reveals why reports of Ethereum's demise are greatly exaggerated – and why institutions betting on 'boring' Ethereum infrastructure will capture the real value in DeFi's institutional in to access your portfolio
Yahoo
an hour ago
- Business
- Yahoo
Solana Eyes 66% Block Size Bump With New Developer Proposal as Network Demand Grows
Solana developers are considering increasing the network's block capacity by 66% as demand for block space on the most widely used network grows. A new proposal, SIMD-0286, floats the idea of increasing Solana's per-block compute limit from 60 million to 100 million compute units (CUs), according to a document posted by core contributors this week. The goal is to let Solana process more transactions and support heavier apps like DEXs, MEV systems, and restaking protocols without hitting compute ceilings. "Block limits' primary purpose is to ensure the vast majority of network participants are able to keep up with the network, by restricting the amount of work a leader is allowed to pack into a block," the proposal's motivation reads. "However, current mainnet traffic is largely not constrained by large block execution times. This proposal aims a substantial increase in block limits to 100 million CUs, in order to provide additional capacity to the network," it adds. Solana currently produces blocks every 400 milliseconds, with strict caps on how much compute can be packed into each one. Earlier this month, the network activated SIMD-0256, which increased the limit from 50 million to 60 million CUs. But developer demand has spiked in tandem, raising the need for even more block space. The new proposal would allow validators to opt into the 100 million CU ceiling via a software upgrade, which is expected to go live in a future epoch once it is adopted. SIMD-0286 only raises the Max Block Units limit, which governs total compute per block. Other limits, such as Max Writable Account Units, stay unchanged. This means the extra capacity will primarily benefit non-vote, parallelizable transactions such as DeFi swaps or NFT mints, without increasing pressure on individual accounts.
Yahoo
an hour ago
- Business
- Yahoo
Multisig Failures Dominate as $3.1B Is Lost in Web3 Hacks in the First Half
Crypto investors lost around $3.1 billion to hacks in the first half of the year, with the first quarter alone topping all the losses of 2024, according to a report from security firm Hacken. The most intriguing finding was that multisignature wallets, which require several people to sign a transaction before it is executed were frequently compromised due to user interface tampering and signer mismanagement. The infamous first-quarter hack of centralized exchange Bybit resulted in a $1.46 billion breach when a compromised safe‑wallet interface tricked authorized signers. It was the third quarter in a row in which the single largest hack originated from multisig lapses. The first half also saw $300 million in rug pulls. Phishing and social engineering campaigns also contributed heavily, chalking up nearly $100 million. Smart contract vulnerabilities were negligible, accounting for less than 2% of total losses. Smart contract bugs, for example the $223M Cetus overflow, attributed to the majority of attacks in the second quarter of 2025. Access-control issues remain the dominant theme, responsible for over 80% of every stolen dollar this year. Hacken urged a shift from reactive auditing to real-time operational defenses. Its report recommends the use of of AI-powered monitoring systems that continuously validate multisig transactions, detect deviations in signer activity and trigger automated safeguards. It also recommends that both CeFi and DeFi projects treat signer protocols, multisig front-ends, and human workflows as security-critical infrastructure, bolstering them with automation, training and tighter governance.
Yahoo
an hour ago
- Business
- Yahoo
Crypto Inflows Surge to $60B Year-to-Date, Outpacing Private Equity: JPMorgan
Capital is flooding into digital assets at a record pace this year, according to Wall Street bank JPMorgan (JPM), marking a sharp contrast with declining flows into private equity and private credit markets. JPMorgan estimates that net capital inflows into digital assets have hit $60 billion year-to-date, a nearly 50% jump since the firm's last update at the end of May, the bank said in a report on Wednesday. That figure includes crypto fund flows, Chicago Mercantile Exchange (CME) futures activity, and crypto venture funding, and puts 2024 on track to eclipse last year's record. 'The surge of capital inflows into digital assets over the past couple of months has likely been supported by favorable U.S. regulations,' analysts led by Nikolaos Panigirtzoglou wrote. Notably, the passage of the GENIUS Act in Congress provided long-awaited regulatory clarity around stablecoins, establishing global standards for dollar-backed tokens and triggering competitive responses abroad, the authors wrote. China is pressing ahead with its digital yuan rollout, and a yuan-backed stablecoin is now in the works in Hong Kong. Meanwhile, the CLARITY Act, currently moving through Congress, aims to define whether digital assets are securities or commodities, potentially making the U.S. more attractive for crypto-native companies compared to the EU's Markets in Crypto-Assets (MiCA) framework, the report said. This friendlier regulatory climate is fueling a resurgence in both private and public crypto markets. Crypto venture capital (VC) funding has picked up, while public market interest is growing following Circle's (CRCL) initial public offering (IPO) and a flurry of new filings with the Securities and Exchange Commission (SEC), the bank noted. Altcoins are also experiencing renewed investor attention, the report said, and ether (ETH), in particular, has benefited from its central role in decentralized finance (DeFi) and smart contracts, and is increasingly being added to corporate treasuries alongside bitcoin. Asset managers have begun exploring new altcoin-based crypto exchange-traded funds (ETFs), some with staking features, signaling rising institutional appetite beyond bitcoin (BTC), the report while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
4 hours ago
- Business
- Yahoo
Ethena Taps Anchorage to Issue $1.5B USDtb Stablecoin Under GENIUS Act
Decentralized finance (DeFi) platform Ethena is set to bring its $1.5 billion stablecoin to the U.S. market, teaming up with crypto bank Anchorage Digital to issue the token under the new stablecoin laws. As part of the partnership the firms announced on Wednesday, federally regulated crypto bank Anchorage will issue the USDtb token directly in the U.S. under the GENIUS Act's compliance standards. That's a move away from the token's current offshore issuance model, a move that aims to create a pathway for institutions to hold and use the token within regulated financial channels. "While we've already seen strong demand for USDtb, we expect GENIUS compliance to empower our partners and holders to confidently and significantly expand its use across new products and platforms," Ethena co-founder and CEO of development organization Ethena Labs Guy Young said in a statement. Ethena's governance token ENA (ENA) is up 9% over the past 24 hours, outperforming the broader crypto market that saw many altcoins plunge 5%-10% overnight. The market benchmark CoinDesk 20 Index was down 1.3% during the same period. The move comes after President Trump signed the GENIUS Act into law last week, a landmark crypto legislation that sets guidelines for stablecoins and issuers to operate in the country. Stablecoins are a $250 billion and rapidly growing class of cryptocurrencies with their prices anchored to an external asset, predominantly to fiat currencies like the U.S. dollar. Tether, issuer of the largest stablecoin USDT, also announced plans to enter the U.S. market under the new law. USDtb, introduced in December, aims to keep a stable $1 price and is backed predominantly by tokenized money market fund BUIDL, issued by BlackRock and Securitize. The token currently has a $1.45 billion supply on the Ethereum blockchain, per data. Ethena also issues the USDe "digital dollar," a token that generates yield by shorting bitcoin, ether and SOL harvesting funding while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
