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Gnosis co-founder and COO Friederike Ernst doesnt like seeing decentralization thrown around as a superficial marketing term.

Its why she takes such pride in the fact that its very affordable right now1 GNO token, about $108 at the time of writingto become a validator on the Gnosis Chain. For context, it costs 32 ETH, worth almost $58,000, to become a validator on the Ethereum network.

That low bar to entry has helped the Gnosis Chain, one of the earliest Ethereum sidechains, amass more than 115,000 validators.

Thats 20% of what Ethereum has, she said on the latest episode ofDecrypt's gmpodcast.

Being a validator on a blockchain means verifying transactions and adding them to the ledger. On proof-of-stake blockchains like Gnosis, validators need to stake tokens to show they have skin in the game. They earn rewards for participating in a way that helps the network and can be penalized if they dont.

Ernst said the focus on true decentralization is what sets Gnosis Chain apart from other Etherem layer-2 scaling solutions.

If you go to the likes of Solana and Polygon and Avalanche, and so on, it's super, super small numbers of validators, Ernst said. I think it's really easy to forget about the benefits of decentralization until you need them. And then it's too late.

As of Wednesday morning, Solana had about 10,000 validators, Polygon intentionally keeps its validators capped at 100, and Avalanche had 1,200 validators.

We have the exact same L2s on Gnosis Chain, by the way. So yeah, definitely not knocking them, she added about the other L2s. They're super useful for many kinds of applications.

Ernst left a career as a physicist to join Gnosis in 2017, two years after it was founded by CEO Martin Koppelman and chief technology officer Stefan George. At the time, Gnosis had just spun out from blockchain venture studio ConsenSys, which was started by Ethereum co-founder Joseph Lubin.

Before she left academia, Ernst had earned her PhD in Berlin, completed postdoctoral work at Columbia University and Stanford, and was working as a professor at the University of Hamburg.

The decision to leave academia behind was hard, but ultimately she decided it was important to help build tools that would give agency back to people. And as passionately as she talks about the importance of decentralization, she knows that it comes with tradeoffs.

For developers, the entire process of building applications gets much harder when infrastructure is decentralized. It's easier to just build on a centralized platformand a shortcut that too many crypto projects have taken, in Ernst's assessment.

If you think about building the exact same applications, just on AWS, it would be cheaper and easier and better user experience," she said. "And then you build it on a blockchain that is barely a blockchain in terms of decentralization, and you have the downsides of both worlds and the upside is mostly marketing. And to me, it's not a great state of affairs.

Read more:

Why True Decentralization at Scale Is Hard and Rare: Gnosis Co-Founder - Decrypt

Ethereums developers have locked in a date for the networks next big upgrade, dubbed Shanghai: April 12. While ETH fans will laud the update for introducing the ability to unstake ETH, it couldnt be happening at a worse time.

SEC chair Gary Genslerindicated again this week that proof-of-stake modelslike those used by Ethereumare securities. Meanwhile, the NYAG filed charges against the KuCoin exchange for illegally selling securities and specifically named ETH as a security in large part due to the fact that Ethereum is not decentralized after all.

Add to that the fact that the past 12-24 months have seen legislators, regulators, and law enforcement all clamp down on illegalities within the industry in different ways. For instance, in January, theSEC took actionagainst lend-to-earn programs jointly operated by Genesis and Gemini on the basis that they amounted to illegal securities offerings. Nexo Capital paid the SEC a$45 million dollar settlement over its lend-to-earn program around the same time.

Most notable about these actions is that they confirm that the SEC is beginning to deconstruct themyth of decentralizationand the role it plays in determining whether a given asset offering amounts to a security. Look at the language used by Gensler in aninterviewwith The Block in 2021, right as the SEC began to look at lend-to-earn products:

I would note to your readers that if youre investing on a centralized exchange or a centralized lending platform, you no longer own your token. Youve transferred ownership to the platform. All you have is a counterparty risk. And that platform might be saying, as many of them do, well give you a four percent or seven percent return if you stake your coins with us or you actually transfer ownership and we the platform will stake your tokens. That takes on all the indicia of what Congress is trying to protect under the securities laws.

This should represent an enormous red flag for Ethereum and BTCtwo projects that the SEC has long considered the rare exceptions to its general position that most digital assets are, in fact, securities. Thats because these exceptions arise from the SECs assumption that both projects are decentralized: without a centralized body governing projects like these, according to the SECs logic, it cant be said that investors had a reasonable expectation of profits relying on theefforts of others, as is required by the Howey test for securities (their belief that BTC is not a security is also based on a misguided interpretation of that projects history).

These exceptions were always highly tenuous and at odds with reality. As time has gone on, they have become increasingly difficult to justify. Now, it seems, regulators and law enforcement have finally seen the lie for what it is.

Ethereum was always a securitybut now its obvious

The idea that Ethereum is anything but a security has always been a sham. This was obvious from Buterins own marketing at the time of the ETH ICO right through to the language used on Ethereum websites today. The point is made repeatedly: ETH production will slow dramatically over time, increasing scarcity and, as a consequence, value.

The Ethereum foundation website alsorefersto the fact that ETH is viewed as an investment.

But the biggest lie of all was that Ethereum is or has ever been decentralized. This was obvious back in 2016 when a decentralized autonomous organization (DAO) holding almost 15% of all ETH in circulation was hacked. Ethereums developers, led by founder Vitalik Buterin, proposed, approved, and implemented the solution to fork the network and recover the stolen assets. There was the charade of a vote on the proposal, but just 6% of all ether holders participated, and 25% of the votes came from a single address, while the proposals at the heart of the vote were still authored by Ethereums core team. This can be seen again as recently as this week with the Shanghai update announcement: If Ethereum is decentralized, then who is designing, proposing, and implementing these radical upgrades? That would be the very same people that intervened after the DAO hack, of course. This is not decentralization by any realistic definition.

The notoriousEthereum 2.0 upgrade, which moved the networks consensus mechanism from Proof-of-Work to Proof-of-Stake, did nothing to change this reality. If anything, the migration to Proof-of-Stake moved Ethereum even deeper into security territory. In contrast to Proof-of-Work, where miners are at least undertaking work of their own in solving hash puzzles, those staking under a Proof-of-Stake system are relying entirely on the work of others to deliver profits on whatever coins have been staked. In fact, this week, Gensler again indicated that Proof-of-Stake networks are likely to trigger U.S. securities laws, saying:

Whatever theyre promoting and putting into a protocol, and locking up their tokens in a protocol, a protocol thats often a small group of entrepreneurs and developers are developing, I would just suggest that each of these token operators seek to come into compliance, and the same with the intermediaries, he said,reportedby The Block.

Authorities are already taking action on the basis that ETH is a security

This sea change by authorities is not just a speculation over some hypothetical future enforcement drive. Instead, the enforcement drive is already here.

Last week, the New York Attorney Generalfiledcharges againstexchangeKuCoin over failing to register as a securities and commodities broker-dealer: ETH, which is listed by the exchange, was expressly labeled a security in the charges. The language used by the NYAG couldnt be clearer:

ETHs development and management is largely driven by a small number of developers who hold positions in ETH and stand to profit from the growth of the network and the related appreciation of ETH.

Further down:

Buterin and the Ethereum Foundation retain significant influence over Ethereum and are often a driving force behind major initiatives on the Ethereum blockchain that impact the functionality and price of ETH.

The language could have been taken straight fromHowey: ETH is not decentralized, and the continued development of the network is closely governed by a core group of developers who promote the asset on the basis that its value will increase over time. It is a classic security.

The NYAGs action is against KuCoin rather than anyone directly connected to Ethereum, but between Ethereums recent upgrades, Genslers public statements on centralization and the SECs recent enforcement actions, it seems that the SEC charges against Ethereum and its developers directly cant be far away. The ramifications of an SEC case against Ethereum can be much wider reaching: the SEC is empowered to levy fines and penalties against those violating the U.S. securities regime, including disgorgement of all profits made in connection with an unregistered securities offering and injunctions against carrying on further business. In short, it could spell the end of Ethereum altogether.

And if the myth of decentralization with respect to ETH has finally been pierced, then you can bet that BTC is up for the same treatment.

FollowCoinGeeks Crypto Crime Cartelseries, which delves into the stream of groupsfromBitMEXtoBinance,Bitcoin.com,Blockstream,ShapeShift,Coinbase,Ripple,Ethereum,FTXandTetherwho have co-opted the digital asset revolution and turned the industry into a minefield for nave (and even experienced) players in the market.

New to Bitcoin? Check out CoinGeeksBitcoin for Beginnerssection, the ultimate resource guide to learn more about Bitcoinas originally envisioned by Satoshi Nakamotoand blockchain.

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NYAG calls Ethereum a security and destroys decentralization myth - CoinGeek

REFORMS OVERVIEW

STARTING A BUSINESS (more info)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms.

ENFORCING CONTRACTS (more info)

Compared to some years ago when it was one of the lowest rankers under the Doing Business Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .

CONTRACT EXECUTION (more info)

Creation of special chambers of commerce for small debts Creation of chambers of commerce at the Court of Appeal Civil and commercial cases now handled by distinct clerks Establishment of commercial courts in Lom and Kara Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform A maximum period of 100 days was fixed to settle a commercial dispute .

TRADING ACROSS BORDERS (more info)

In comparison to previous years,Togo has significantly improved its ranking under theTrading across borders indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export.

In comparison to previous years, Togo has significantly improved its ranking on the Trading across borders index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

CONSTRUCTION PERMIT (more info)

After moving from the 133rd to 127th place under the 2020 Doing Business construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.

GETTING ELECTRICITY (more info)

Over the past two years, Togos ranking under the Doing Business Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lom plans to introduce even more reforms this year to keep up its improvements.

REGISTERING A PROPERTY (more info)

Out of all the 'Doing Business indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lom has been introducing many reforms, with the latest batch implemented this year.

PUBLIC PROCUREMENT(more info)

From professionalization to digitization, through legislative regulations, Togos public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.

PAYING TAXES AND DUTIES (more info)

To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.

See more here:

Decentralization: In Togo, Yoto III municipality adopts a CFA4 billion ... - Togo First

The blockchain trilemma: optimizing for security, scalability, and decentralization, has been raging for years. Its kept the industrys brightest minds awake at night, inspired an array of new chains sporting novel consensus mechanisms, and spawned a thriving multi-chain universe.

Today, developers are blessed with a plethora of chains to choose from, most boasting greater security, scalability, and decentralization than their predecessors. With varying levels of throughput, speed, and interoperability, each new network offers differing features, benefits, and trade-offs.

DeFiChain is one such offering, providing an ecosystem for flourishing decentralized finance applications. Developers seeking a playground for deploying their dApps have a wealth of options on DeFiChain, combining Bitcoins security with the speed and scalability of a next-generation blockchain. Furthermore, with the upcoming DeFi Meta Chain (DMC), they will have all the tooling they need to easily build EVM-compatible dApps.

DeFiChain is a blockchain network thats designed for decentralized finance. It combines a highly scalable and high-speed protocol with a high degree of decentralization, making it suitable for routing high-value transactions and holding significant TVL. Use cases envisioned for DeFiChain include lending, trading, non-collateralized debt, and asset tokenization.

Keep Reading

Features include:

DeFiChains decision to anchor its blockchain to Bitcoin is unusual but not without precedent, RSK pioneered this move. DeFi on Bitcoin is an untapped market with massive potential if implemented properly. DeFiChain saves its most recent Merkle tree to the Bitcoin blockchain every few minutes, providing an immutable transaction record.

DeFiChain is not a general-purpose blockchain. This means that commands outside the basic set of functions are not allowed. This reduces the attack surface for smart contracts, creating a safer run-time environment.

Further information on DeFiChains architecture can be found in its technical whitepaper. As for the benefits of building on DeFiChain, take your pick from any of the following:

Developers interested in getting started on DeFiChain can find all the needed resources here.

Reasoning that two chains are better than one, DeFiChain is preparing to launch a second blockchain this year to push the limits of whats possible in DeFi. DeFi Meta Chain (DMC) is an upcoming layer-2 EVM blockchain with Proof of Anchor consensus built as an extension to the native non-Turing complete DeFiChain.

DeFi Meta Chain will allow for the expansion of use cases for the native DeFiChain while maintaining its core principles of fast, secure, intelligent, transparent, and decentralized financial services. It allows for the stability of the native DeFiChain while gaining the flexibility to achieve true Web3 compatibility. The DeFi Meta Chain is what makes building advanced dApps and smart contracts possible without limitations.

DMC will allow developers to access tools, infrastructure, smart contracts, and support from other ecosystems via the EVM environment. Whereas DeFiChain is non-Turing complete, DMC is a Turing complete L2. As a result, any code bases that have already been deployed within web3 can be used on the DeFi Meta Chain. A full stack of web3 services and projects will be integrated with DMC, including wallets, NFT projects, metaverses, and existing dApps.

As an L2, DeFi Meta Chain will support ultra-low cost transactions, ideal for high volume dApps, and will connect to the thriving layer-2 ecosystem. This year will see its constituent parts slotted into place, including a testnet, hackathon, launchpad, and, crucially, a $100M incubator program.

2023 is shaping up to be a big year for DeFi, whose developers have been significantly stung by accusations of failure to innovate over the last two years. Expectations are high that new use cases will emerge this year, including smarter liquidity protocols, better interoperability, safer bridges, and the return of yield farming, albeit in a more sustainable form.

Its also shaping up to be a big year for DefiChain, which will soon boast two interconnected networks where developers can put its capabilities to the test. In addition, the launch of DeFi Meta Chain, with its web3-ready credentials, will add yet another contender to the burgeoning L2 sector. With the promise of hackathons and incentivized developer programs, there will be plenty of reasons to consider building on DeFi Chain this year.

The blockchain trilemma: optimizing for security, scalability, and decentralization, has been raging for years. Its kept the industrys brightest minds awake at night, inspired an array of new chains sporting novel consensus mechanisms, and spawned a thriving multi-chain universe.

Today, developers are blessed with a plethora of chains to choose from, most boasting greater security, scalability, and decentralization than their predecessors. With varying levels of throughput, speed, and interoperability, each new network offers differing features, benefits, and trade-offs.

DeFiChain is one such offering, providing an ecosystem for flourishing decentralized finance applications. Developers seeking a playground for deploying their dApps have a wealth of options on DeFiChain, combining Bitcoins security with the speed and scalability of a next-generation blockchain. Furthermore, with the upcoming DeFi Meta Chain (DMC), they will have all the tooling they need to easily build EVM-compatible dApps.

DeFiChain is a blockchain network thats designed for decentralized finance. It combines a highly scalable and high-speed protocol with a high degree of decentralization, making it suitable for routing high-value transactions and holding significant TVL. Use cases envisioned for DeFiChain include lending, trading, non-collateralized debt, and asset tokenization.

Keep Reading

Features include:

DeFiChains decision to anchor its blockchain to Bitcoin is unusual but not without precedent, RSK pioneered this move. DeFi on Bitcoin is an untapped market with massive potential if implemented properly. DeFiChain saves its most recent Merkle tree to the Bitcoin blockchain every few minutes, providing an immutable transaction record.

DeFiChain is not a general-purpose blockchain. This means that commands outside the basic set of functions are not allowed. This reduces the attack surface for smart contracts, creating a safer run-time environment.

Further information on DeFiChains architecture can be found in its technical whitepaper. As for the benefits of building on DeFiChain, take your pick from any of the following:

Developers interested in getting started on DeFiChain can find all the needed resources here.

Reasoning that two chains are better than one, DeFiChain is preparing to launch a second blockchain this year to push the limits of whats possible in DeFi. DeFi Meta Chain (DMC) is an upcoming layer-2 EVM blockchain with Proof of Anchor consensus built as an extension to the native non-Turing complete DeFiChain.

DeFi Meta Chain will allow for the expansion of use cases for the native DeFiChain while maintaining its core principles of fast, secure, intelligent, transparent, and decentralized financial services. It allows for the stability of the native DeFiChain while gaining the flexibility to achieve true Web3 compatibility. The DeFi Meta Chain is what makes building advanced dApps and smart contracts possible without limitations.

DMC will allow developers to access tools, infrastructure, smart contracts, and support from other ecosystems via the EVM environment. Whereas DeFiChain is non-Turing complete, DMC is a Turing complete L2. As a result, any code bases that have already been deployed within web3 can be used on the DeFi Meta Chain. A full stack of web3 services and projects will be integrated with DMC, including wallets, NFT projects, metaverses, and existing dApps.

As an L2, DeFi Meta Chain will support ultra-low cost transactions, ideal for high volume dApps, and will connect to the thriving layer-2 ecosystem. This year will see its constituent parts slotted into place, including a testnet, hackathon, launchpad, and, crucially, a $100M incubator program.

2023 is shaping up to be a big year for DeFi, whose developers have been significantly stung by accusations of failure to innovate over the last two years. Expectations are high that new use cases will emerge this year, including smarter liquidity protocols, better interoperability, safer bridges, and the return of yield farming, albeit in a more sustainable form.

Its also shaping up to be a big year for DefiChain, which will soon boast two interconnected networks where developers can put its capabilities to the test. In addition, the launch of DeFi Meta Chain, with its web3-ready credentials, will add yet another contender to the burgeoning L2 sector. With the promise of hackathons and incentivized developer programs, there will be plenty of reasons to consider building on DeFi Chain this year.

See original here:

DeFiChain Aims to Woo Developers with the Upcoming Meta Chain - Finance Magnates

Centralized crypto finance took a beating over the last year.

But the people and investors who relied on centralized structures like FTX also took a beating, mostly because they put their trust in these flawed organizations.

Our experience in the crypto space over the last 12 months reveals the need for more and better decentralization in crypto finance. We need more decentralized finance (DeFi), and the centerpiece for meaningful, widespread decentralization will be the rise of decentralized autonomous organizations, or DAOs.

Obstacles remain for DAOs, but the overall value proposition and world-changing potential remain exciting. The current crypto market provides an ideal landscape in which to nurture, prune and refocus DAOs so that they remain an important part of the future and find an edge over their predecessor, the traditional organization.

DAOs face some challenges that continue to prevent them from becoming a premier form of organization.

One is scaling. Democratic organizations work well up to a certain size, but at a larger scale, they can become slow and inefficient. This is usually solved through some kind of specialization, hierarchy or permissions in traditional organizations, and we dont know yet if, or how, DAOs can grow massively across borders, languages and cultures in a way that can be efficient, focused, functional and fair.

Another challenge is voting distribution. The jury is still out on how to distribute voting (or governance) tokens among DAO participants in a way to maximize the health and growth of these organizations over the long run.

Treasury management is also a sticky matter for DAOs. Our collective experience with DeFi over the past couple of years has shown that our reliance on multi-sig treasury deployment is both a security risk and can blunt efficiency. In that same basket is the issue of stable, predictable compensation for those who produce in a DAO. Most people dont want to be paid in a volatile, risky asset and this is usually the case with native project tokens.

Story continues

Its likely that, to attract talent from outside the existing DeFi-degen echo chamber, DAOs will have to start using reliable compensation and governance programs without devaluing project tokens.

But despite these challenges, there remains plenty of potential for DAOs.

In traditional structures like FTX, directors and board members tend to make all the key decisions and the rest of the employees are expected to do whats asked of them regardless of whether they agree or not.

DAOs create a structure in which the governance of an organization is democratized because participants, or token holders, have the right to submit and vote on proposals that determine the future of the DAO. In other words, DAO participants, for better or worse, decide on the future of the DAO as the majority vote prevails.

With greater transparency and democracy comes the potential for inefficiency. We have seen this with MakerDAO where members submitted a proposal suggesting that the DAO take temporary measures to increase centralization in order to increase efficiency. (The DAO voted against this.) Furthermore, the voting systems within DAOs are far from equal as participants with larger stakes in a DAOs token typically have greater voting rights. Unequal voting rights coupled with poor voting turnouts have led to 1% of token holders having 90% of voting power within a selection of certain DAOs, according to Chainalysis.

It is true that DAOs still have some ways to go to achieve democratic realities that are ideal. However, as a young innovation, there is plenty of room to improve as DAO participation grows.

By creating a structure in which all participants own the DAOs token, participants are invested in their own organization. In traditional organizations, growth matters most to VCs, shareholders and the people at the top of the pile. This can be demotivating for those lower down in the hierarchy who might work incredibly hard but not fully reap the rewards.

In DAOs, everyone is literally invested in the organization. It is thus in everyones interest to see the organization grow. Furthermore, as DAOs become more successful, their native tokens can increase in value, which inevitably motivates holders of the token to be more productive as individuals will be better off as their organization develops. This remains an exciting feature of DAOs.

Every organization requires some sort of capital to set up. However, fundraising can prove to be a roadblock no matter how innovative ideas may be. Typically, entrepreneurs depend on VCs who have the capital power to support these organizations. But there are drawbacks to this model including the lack of access to VCs, the expectation of an exit within a short time horizon, and funding with no strategic input.

DAOs show us that funding no longer has to come exclusively from VCs. Gathering sources from those who believe in a single mission could be more strategic as they do not have the same exit ambitions as VCs, and opens up participation to anyone who has access to the internet.

Were seeing a major leveling-up of on-chain DAO tools and services that could help.

Organizations of the future will be even more nation-agnostic than they already are. That means we need structures that can bring organizations to the global stage seamlessly. In a world where legal systems are still localized, start-ups face obstacles including having to identify presence within specific legal structures in every new country.

On the other hand, DAOs benefit from the blockchain that puts them on the global stage by default. With the correct tooling, DAOs can have a head start over traditional organizations by cutting out the legal and regulatory wranglings that most start-ups have to overcome. We have seen many DAOs and projects flourish as a consequence of their global nature, for example, Uniswap which has facilitated over 119 million trades worldwide.

When agreements are not honored by parties, instead of using courts for legal recourse, DAOs benefit from smart contracts, a more modern and potentially efficient form of enforcement. While currently imperfect, in the near future, oracles that provide blockchains with real-world data will help facilitate this.

This ecosystem will continue to require growth and maturity in the oracle space. That means developing and partnering with projects that make it easier, more efficient and more secure to get real-world data on-chain in a way that allows crypto developers to focus on their novel mechanisms and designs instead of belaboring data verification. We need our oracles to be flexible enough to handle ambiguity.

As oracle infrastructure matures, DAOs will become trustless and truly decentralized a system not possible with traditional organizations.

DAOs have already blown up within the Web3 space with more than 11,500 currently operating. We are seeing a shift in the Web3 space as DAOs are proving to be an alternative to traditional organizational structures.

DAOs are far from perfect as it remains to be seen how they will evolve and address their problems with inefficiency and unequal voting power. However, the use of appropriate tooling will allow these organizations to solve some of their issues.

As we peer into the future, it will be fascinating to watch which DAOs emerge and how they will disrupt the future of organizational structures.

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How DAOs can be remade to be more efficient and successful - Yahoo Finance