Welcome to The Protocol, CoinDesk’s weekly wrap-up of the most important stories in cryptocurrency tech development. I’m Ben Schiller.
In this issue:
- Ethereum’s Final Pectra Test Goes Live
- Hyperliquid Eases Token Transfers for DeFi
- Celo Migration to Layer-2 Network Is Done
- Bitcoin DeFi Expansion Faces Fork Dilemma
This article is featured in the latest issue of The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday.
Network news
IT’S ALIVE! ETHEREUM PECTRA TEST: The final dress rehearsal for Ethereum’s upcoming Pectra upgrade occurred Wednesday, as the blockchain’s most significant changes in over a year were tested once more following a series of mishaps. The upgrade on the new Hoodi testnet garnered attention after prior tests on the Holesky and Sepolia test networks failed to finalize properly. Developers introduced Hoodi as the latest testnet to provide ecosystem players, especially staking providers, one last testing opportunity before the Pectra upgrade reaches Ethereum’s mainnet. The test involved passing Hoodi various code changes aimed at enhancing user-friendliness for end-users and developers alike. One notable change enables smart contract functionality in wallets, allowing wallet software developers to introduce convenience-oriented features, such as paying transaction fees in cryptocurrencies other than ether (ETH). Testnets serve as replicas of main blockchains, allowing developers to run substantial code changes in a low-stakes environment to patch out any bugs before implementing them on the mainnet. Following a successful run on Wednesday, developers plan to monitor the Pectra upgrade for approximately 30 days before its activation on Ethereum’s mainnet. — Margaux Nijkerk Read more.
HYPERLIQUID EASES TOKENS FOR DEFI: The decentralized finance (DeFi) sector continues to drive significant value and revenue for crypto projects, yet its inherent complexity can leave users entangled in numerous blockchains, bridges, wallets, and tokens. A technical update from Hyperliquid aims to simplify this process for developers and users alike, enabling direct token linking on HyperCore and HyperEVM platforms. HyperCore serves as the native platform for spot assets (tokens able to be traded directly), whereas HyperEVM is an Ethereum Virtual Machine (EVM) network executing smart contracts on Ethereum. Core spot tokens on HyperCore can now be linked with their counterparts on HyperEVM, referred to as EVM spot. Once linked, users can easily transfer tokens using straightforward actions — such as a “spotSend” on HyperCore or standard ERC-20 transfers on HyperEVM. This functionality allows tokens to move directly between these platforms without third-party intermediaries, facilitating a more accessible experience for users regardless of their level of expertise. — Shaurya Malwa Read more.
CELO MIGRATION TO LAYER-2: The long-anticipated migration of the Celo blockchain to becoming an Ethereum layer-2 chain has been successfully completed, concluding an extensive two-year journey shared by the key organizations behind the network. The transition marks the culmination of a process initiated in July 2023 that included community voting and intense competition among layer-2 networks vying for Celo’s partnership, ultimately decided in favor of Optimism. The new layer-2 chain promises enhanced transaction speed and reduced costs while leveraging the established Ethereum mainnet. Powered by Optimism’s OP Stack, a customizable framework for building layer-2 networks, the migration stands as a pioneering model for other EVM-compatible blockchains looking to adopt layer-2 technology. According to Celo Foundation CEO Rene Reisberg, this migration offers a valuable blueprint for future developments in the Ethereum ecosystem. — Margaux Nijkerk Read more.
BITCOIN DEFI FACES FORK DILEMMA: Bitcoin developers are exploring options to expand the blockchain’s decentralized finance capabilities, particularly looking into zero-knowledge (ZK) proofs. This functionality, which necessitates a soft fork—essentially a new version of the software—presents complexities that, according to Bitcoin veteran Edan Yago and core contributor to BitcoinOS (BOS), can prove challenging. Yago likens forking a blockchain with a $2 trillion valuation to performing open-heart surgery. ZK proofs offer a cryptographic method to validate statements while maintaining privacy, yet they are not currently present in Bitcoin’s software. Proposed implementations like OP_CAT and OP_CTV could facilitate this functionality. Yago emphasized the need for developers to demonstrate alternative methods to achieve ZK capability in Bitcoin without a fork. The BOS aims to accomplish this through BitSNARK, a rollup protocol that integrates ZK verification on Bitcoin, allowing interoperability with other blockchains such as Ethereum, Solana, and Cardano. The recent introduction of BitVM has also set the groundwork for Ethereum-like smart contracts on Bitcoin. — Jamie Crawley Read more.
In Other News
In a recent two-hour interview, CoinDesk Senior Anchor Christine Lee spoke with Strategy Executive Chair Michael Saylor, discussing topics ranging from a U.S. Bitcoin strategic reserve to investor concerns and his vision for economic immortality. — Christine Lee reports.
Crypto start-up Plasma has launched its blockchain designed for rapid and efficient global stablecoin transfers, employing a HotStuff-inspired consensus mechanism. — Omkar Godbole reports.
Regulatory and policy
U.S. Senator Kirsten Gillibrand (D-N.Y.) has cautioned the cryptocurrency industry against advocating for a diluted version of the stablecoin legislation currently progressing in the Senate. She stresses that stringent regulations are crucial to foster innovation and safeguard investors against risks exemplified by the bank run on Silicon Valley Bank in 2023 and the collapse of the FTX exchange in 2022. – Cheyenne Ligon report.
Calendar
April 8-10: Paris Blockchain Week
April 30-May 1: Token 2049, Dubai
May 14-16: Consensus, Toronto
May 20-22: Avalanche Summit, London
May 27-29: Bitcoin 2025, Las Vegas
June 30-July 3: EthCC, Cannes
Oct. 1-2: Token2049, Singapore
