‼️ FTX Hackers Charged

In this edition we explore Eigenlayer restaking, Celsius bankruptcy and the upcoming Ethereum fork.

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Key Terms

Actively Validated Services (AVS): chains, services, or middleware on Eigenlayer. 

What is it? Eigenlayer is a shared security protocol that permits the use of ETH to secure chains, services, or middleware. This process allows protocols to leverage the Ethereum network instead of building their own validator service. 

What does it do? Eigenlayer takes liquid staked ETH (stETH) and restakes or deposits the ETF onto Eigenlayer. The AVSs then use the staked ETH to secure their chains, services or middleware. In exchange, users who deposited the staked ETH get additional yield on top of existing staked ETH yield. 

Why is it interesting? Eigenlayer offers a new use-case for ETH as it can help scale other chains quickly. This is a novel design mechanism for bootstrapping security for a new blockchain and other services instead of starting from scratch. 

Important connections: Eigenlayer allows for a potential convergence of Ethereum and Cosmos as users are able to create Cosmos applications on Eigenlayer.

😲 FTX SIM-Swappers Charged

Last week, the DOJ charged Robert Powell, Carter Rohn and Emily Hernandez with fraud, conspiracy and identity theft linked to an FTX hack. The three hackers drained $400 million from FTX through a SIM-swap in 2022. The hack occurred shortly before FTX collapsed. Between 2021-2023 hackers successfully conducted SIM-swaps on a total of 50 victims.

❌ OPNX Shutting Down

3AC founders announced the closure of their latest endeavour, OPNX. Less than a year ago Su Zhu and Kyle Davies started the exchange which allows users to trade crypto bankruptcy claims. When OPNX went live in April last year, there were less than $2 of volume traded within the first 24-hours. Customers have been told to settle their positions by February 7th. This follows the collapse of 3AC in July 2022.

❗ETH Hard Fork to be Scheduled

Ethereum developers intend to set a Dencun hard fork date this week. The hard fork will implement Dencun, the latest upgrade to the network. Recent testing reportedly went well, including the Sepgolia fork on January 30th. An upgrade on the Holesky testnet is scheduled for February 7th and, if it is successful, developers will decide when to launch Dencun on mainnet. The Dencun upgrade is meant to improve scalability and reduce transaction costs on L2s.

💰 Celsius Exits Bankruptcy

After collapsing in 2022, Celsius has announced that it has been cleared to exit bankruptcy and will return $3 billion to creditors. The funds will be returned as fiat and cryptocurrency and will be sent via PayPal and Coinbase. In its announcement, Celsius stated its stock is “expected to be publicly traded once the requisite approvals are received”.

📚 N+1 Recommendations 

The N+1 reading and media recommendations are sourced from our team of experts and offer weekly suggestions for learning more about blockchain, crypto, finance and technology.

This weeks recommendation: The Infinite Machine by journalist and The Defiant founder Camille Russo

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