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THE DAILY INDEX

Technology, AI, software, security, crypto and business

MARKETS & BUSINESS

TLDR Crypto

BITCOIN BOUNCES BACK ABOVE $67,000 AS TRADERS NAVIGATE A ‘LIQUIDITY HUNT' POST-SURGE

Bitcoin has stabilized around $67,500 after a brief dip to $65,000, with analysts attributing the recent pullback to a “liquidity hunt” following last week's surge near all-time highs. Market experts expect Bitcoin to retest $70,000 resistance, with volatility anticipated around the November 5 presidential election. Other factors impacting price could be the Non-Farm Payroll data on November 1. A break above $71,000 could occur after the election.

PRACTICAL ENDGAME ON ISSUANCE POLICY

This comprehensive proposal outlines two potential approaches to Ethereum's long-term issuance policy. The first is a “hard endgame” that caps stake growth through negative infinity yields as stake increases, and the second is a more viable endgame that maintains positive yields while probabilistically limiting stake growth. The proposal recommendeds to set a maximum issuance of 0.5% of circulating supply annually with reward curves that maintain solo staker viability. It notes the importance of considering and burning MEV to achieve optimal outcomes.

UNDERSTANDING PARALLELIZATION

Solana's use of parallelization in both transaction processing and block propagation increases throughput as it successfully simultaneously runs multiple processes. This method was not commonly used in earlier blockchains like Ethereum. Solana achieves efficiency by requiring transactions to specify which blockchain resources they access, while other blockchains like Ethereum use “optimistic parallelization”, which processes everything in parallel and addresses conflicts afterward.

POSSIBLE FUTURES OF THE ETHEREUM PROTOCOL, PART 3: THE SCOURGE

The Scourge tackles the centralization risks present in block construction and staking economics. Proposals for block construction include implementing inclusion lists and encrypted mempools to reduce builder centralization, which is currently dominated by two actors controlling 88% of blocks. With 30% of ETH supply staked, developers are considering mechanisms to prevent over-staking, including adjusted issuance curves. The proposals aim to balance decentralization with economic incentives.

WHY CONSUMER CRYPTO COMPLETELY SCREWED UP

Crypto's fundamental misstep in 2021 was attempting to create artificial scarcity in digital goods, which directly opposed the Internet's trend toward democratization and abundance. Music NFTs attempted to monetize digital content when historical trends showed the value of experiences over assets. More successful approaches align with Internet principles by focusing on democratizing experiences and disintermediating middlemen.

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