Daily Edition · Page 6

THE DAILY INDEX

Technology, AI, software, security, crypto and business

MARKETS & BUSINESS

TLDR Crypto

BINANCE AND THE US APPROACH TO CRYPTO

Binance had a lot of issues around a lack of controls and illicit financial activities on its platform, but these problems plague any rapidly-going financial entity in a new industry. In fact, existing financial institutions, including Goldman Sachs, paid billions of dollars in the past few years for similar violations. Binance's CEO faced severe penalties while similar or worse violations by traditional banks have resulted in much smaller consequences, suggesting a bias in how the two systems are treated.

THE FAT APP THESIS

The Fat Protocol Thesis says that chains capture more value than apps built on them since apps have weak moats and drive network effects to the underlying chain. This idea has spurred L2s to raise at massive valuations, even though they don't have valuable apps. The new “Fat App Thesis” is that there's outsized value to crypto apps as they are at the end of the infrastructure boom and are beginning to have user moats. At the same time, chains have become interchangeable and the attention economy has been extended to web3 with a few major winners.

BASE MAINNET 09/21/24 INCIDENT POSTMORTEM

Last week, the Base L2 experienced a 17-minute block-building outage due to a misconfiguration in its newly implemented conductor sequencer cluster. This misconfiguration resulted in a failure of leadership transfer between sequencer instances. While the chain's integrity and user funds remained secure, the incident highlighted the need for improved configuration management processes and more robust failover mechanisms. Base has committed to fixing the issue and preventing similar problems from happening.

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