Daily Edition · Page 6

THE DAILY INDEX

Technology, AI, software, security, crypto and business

MARKETS & BUSINESS

TLDR Crypto

ARTHUR HAYES ON CRYPTO BULL MARKET

Arthur Hayes, co-founder of BitMEX, suggested that the crypto bull market is coming back because of recent interest rate cuts by the Bank of Canada and the European Central Bank, potentially marking the start of a global easing cycle. He speculated about further rate cuts by other central banks, and took a cautious stance on the U.S. Fed's actions given the proximity to the presidential election. Hayes ultimately concluded by encouraging investments in bitcoin and other crypto in light of these developments.

THE NEED FOR HIGH-PERFORMANCE ZERO KNOWLEDGE PROVING

ZK proving is critical for scaling Ethereum and realizing the vision of verifiable computing for a wide range of applications. Much like how improvements in prior IT systems have exponentially increased mass adoption of computers, reducing proving costs could bring ZK to AI, IoT, and the rest of the internet. Efficiency improvements require leveraging parallel processing, application-specific hardware, and acceleration systems with direct memory access.

DEEP DIVE INTO COINBASE SMART WALLET

Coinbase has introduced a new Smart Wallet, offering a self-custodial solution that uses biometrics and a passkey system to secure transactions via a user-specific smart contract. This innovative approach ensures that users retain sole ownership of their wallet, with multiple layers of recovery provided by iCloud Keychain and Google Password Manager, minimizing reliance on intermediaries and enhancing user control and security in managing their digital assets.

GAS FEES IN BLOCKCHAIN

Gas fees on blockchains compensate validators for their computational work and help prevent DDoS attacks. Fees vary based on blockchain activity, transaction complexity, and a user's willingness to pay. Ethereum's fees are higher due to its focus on decentralization and comparatively lower computational demands, leading to network congestion. In contrast, Solana's more powerful network (more centralized) allows for faster processing and lower fees. Gas fees are not retained by Ethereum's creators (e.g., Vitalik Buterin), they are used for validator rewards and partially burned, supporting the token's value.

CRYPTO PRODUCT MISTAKES

The most common pitfalls in crypto product development include misidentifying user needs, incorrectly defining target market segments, delegating crucial functions like marketing to less experienced staff, haphazardly adapting Web2 ideas into Web3 without genuine innovation, overemphasizing the blockchain choice due to its existing user base, and blindly following industry trends without original thought. Each of these errors stems from a fundamental misunderstanding of the market and the unique capabilities offered by crypto.

SYNAPSE TROUBLES WITH BANKING PARTNER HIGHLIGHTS IMPORTANCE OF BRINGING FUNDS ONCHAIN

The situation involving Synapse (banking service provider), Evolve (banking partner), and numerous fintech startups highlights a significant problem in tracking and verifying the location of customer deposits. These issues could be solved by bringing funds onchain. Blockchain tech is a transparent and immutable ledger and could thus resolve uncertainties about the flow of funds and improve overall financial transparency and trust.

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