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Now that the metaverse has mostly come and gone, it looks like the key pillars of Web3 are recalibrating back to reality. Even Vision Pro, Apple's virtual reality proposition, is a lot more about answering emails or watching films than living full-time in a neon cyberpunk wonderland.

Crypto, Web3's most important tenet, is also seeing some use cases come back down to Earth. And while this course correction to nearly mundane functionality is overdue, we've seen few tangible ways to make that happen. Many crypto projects set lofty and unattainable goals to transform the financial industry completely. But harsh regulatory conditions, shaky market climates and no shortage of scandals illustrate why that probably isn't going to happen.

That being said, if crypto can't be a worthy adversary to the world of traditional finance (TradFi), it certainly could be complementary. What's preventing that from happening?

If you ask this question to most crypto enthusiasts, you're likely to hear a tirade about regulatory persecution, the evils of the SEC, and a million other external factors preventing crypto from reaching its full potential. In some cases, they're right. But it's easy to thrust the blame onto regulators or "bad actors" in the industry for putting crypto into an unsavory position and it's not entirely accurate.

Related: Bitcoin as Currency Triggers Our Fear of Missing Out. Can It Be Fixed?

Of course, regulation and legislative misunderstandings are major obstacles that are slow to overcome due to the red tape involved with setting fair and comprehensive rules in crypto. And if crypto is to exist as a functional tool and currency in the real world, as significant industry outsiders say it will, you can't really get around regulation to prevent exploitation and full-fledged industry meltdowns.

If regulators do have a general distaste toward crypto, they can't entirely be blamed for it based on the number of scandals the industry has faced in this past year alone. If anything, it's more about companies not being able to get their act together rather than governments completely writing off crypto as a concept. But that's still not the only factor.

Across the crypto and blockchain sectors, projects tend to latch onto one specific application, trend, or use case and never ease their grip on it until it's too late. Even if it might not be the best thing for the project or the industry, it's difficult to deviate from the rest of the crowd in a sector where everyone is still trying to figure out what clicks.

This isn't an anomaly either we've seen it happen with centralized exchanges, NFTs and depending on who you ask, smart contracts.

As much as crypto companies now preach against the doctrine of FOMO (fear of missing out), there is an unmistakable undercurrent of it throughout new industry developments. When a new technology, especially one with a financial aspect inherently attached, does have so much potential, no one wants to get left behind. That's partly why we notice so much theorizing and abstract blockchain-AI integrations, despite most of them not making much practical sense.

There are, of course, many practical applications of AI in the blockchain and crypto. But when projects, or an entire industry, get attached to one thing, it's hard to put down the blinders and shift focus to other options. Instead of exploring concrete ways to boost functionality for the average person, projects shoot for the moon instead. And ultimately, when each company is trying to one-up the other in scope and adoption, you're bound to have function fall by the wayside.

A big roadblock towards crypto ubiquity and functionality stems from communication. Since many major crypto advancements develop in parallel, getting networks and currencies to communicate requires much more effort. Transferring cryptocurrencies often becomes more troublesome than needed and typically requires using relatively unsafe methods.

Smart contracts are a godsend for certain crypto functions. But they've proven time and again to be insecure and unreliable as they keep getting plagued by hacks. For someone looking to transact using crypto regularly, that creates a real risk to their security. Some projects have deviated from smart contracts too. Companies such as Kima, for instance, are developing protocols and settlement layers to facilitate crypto and fiat transfers without relying on them.

Kima's also eschewing smart contracts to help solve the convoluted mess of international crypto transfers, a facet that crypto should inherently be able to do to function as currency. Not that international transfers are so simple using fiat currency or TradFi methods, but I don't have to worry about committing international securities fraud for using PayPal.

Crypto's philosophy from the beginning was to remove intermediaries and bureaucratic stopgaps that prevent unrestricted financial activity. While certain factors are beyond the control of industry builders, there could certainly be a lot more effort put into finding creative solutions to the sector's inherent problems.

So what is stopping me from using crypto to buy groceries? Quite a few things at this point, and they're mainly interwoven. But reinforcing steady and tangible development into interoperability and streamlined everyday use can make crypto's future less daunting to reach.

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I Want To Buy My Groceries With Crypto So What's Stopping Me? - Entrepreneur

The Data Act has achieved consensus among the legislative representatives of the European Union.

The regulations will establish controls on how Big Tech and other businesses operating within Europe utilize corporate and consumer data.

The legislative representatives of the European Union have reached a consensus on new regulations referred to as the Data Act. This development follows apprehensions the crypto and web3 community voiced regarding the potential negative impact of the regulations on smart contracts, raising concerns that the sector could be adversely affected. Nevertheless, the act has proceeded despite these concerns, incorporating the contentious smart contract kill switch provision.

Following the passage of the Data Act by the European Parliament on March 14, negotiations have been underway among EU lawmakers to finalize the bill.

The primary objective of the act is to ensure the equitable utilization of industrial data and eliminate obstacles that hinder the fair sharing of data generated by various data-centric services, including the Internet of Things (IoT).

The regulations will establish controls on how Big Tech and other businesses operating within Europe utilize corporate and consumer data. This alteration forms part of a broader overhaul of internet-connected devices data regulations.

The existence of decentralized transactions, such as those occurring in the crypto sphere, which is governed by unchangeable code, raises concerns for many. The agreement has been confirmed by Thierry Breton, the commissioner responsible for the EUs internal market.

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The conclusive legal document of the agreement has not yet been released to the public. Nonetheless, reports indicate that the initial proposals regarding smart contracts have undergone tighter revisions. These modifications are intended to enhance individuals authority over their data.

As per lawmaker Damian Boeselage, With the adjustments made to the text, we are no longer addressing smart contracts. Additionally, the regulation applies specifically to the execution of contractual clauses in the context of data sharing.

On the other hand, an alternate source asserted that the laws final version still employs the term smart contracts. In response to concerns raised by the blockchain industry, the commission addressed them by stating that the new regulation would not render existing smart contracts null and void.

Additionally, the commission emphasized that the practical implementation of the high-level requirements outlined in the regulation should not pose significant challenges for vendors.

Nevertheless, it remains to be seen whether the ultimate agreement will address concerns regarding the feasibility of implementing the measures on open and permissionless blockchains where there is no central authority to enforce regulatory limitations.

According to an open letter signed by several crypto groups, the Data Act could conflict with the recently implemented MiCA (Markets in Crypto Assets) regulation. The letter highlights that licenses will be granted to cryptocurrency exchanges and wallet providers to operate throughout the European Union under the regulations. The implementation of MiCA is scheduled for 2024.

However, the Data Act still needs to achieve the status of a law. The approval of the wording reached by negotiators for the Data Act to be recognized as the law requires the endorsement of the European Parliament and Council, representing the 27 European Union nations.

Crypto News Flash does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. Crypto News Flash is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.

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Are Ethereum and Polygon's Smart Contracts Soon to Be Forbidden ... - Crypto News Flash

BlockEstate, a new player in the RWA area, is going to make waves with its innovative use of staking smart contracts. These contracts are a cornerstone of the BlockEstate ecosystem, enabling users to stake their $BEH tokens and earn rewards in $USDC. This article will delve into the mechanics of these staking smart contracts, illustrating their functionality with practical examples.

Staking in the context of blockchain technology usually refers to the process of actively participating in transaction validation on a proof-of-stake (PoS) blockchain. On these blockchains, anyone with a minimum-required balance of a specific cryptocurrency can validate transactions and earn staking rewards.

BlockEstate has adopted this concept and integrated it into its real estate project, allowing users to stake their $BEH tokens. Since BlockEstate is not a blockchain, but a protocol on the Arbitrum Blockchain, its staking mechanism does not validate transaction on the Blockchain, but solely gives $BEH token holders the ability to participate in governance and receive their slice of protocol profits.

The staking process on BlockEstate is governed by smart contracts. A smart contract is a self-executing contract with the terms of the agreement directly written into code. It is stored and replicated on the blockchain, and its execution is supervised by the network of computers that run the blockchain. This ensures that the contract is executed exactly as written, providing a high level of trust and security.

BlockEstates staking smart contracts work in a straightforward manner. Users who wish to stake their $BEH interact with the contract by sending a transaction to it, indicating the amount they wish to stake. The smart contract then stores these tokens. In return, the staker receives rewards, which are also defined and automatically distributed by the smart contract. BlockEstate will use $USDC rewards, which are distributed by the staking contract over the course of three months. Every three months the contract is refilled with new $USDC. But, where does the USDC come from?

The rewards for staking come from one source: Real World Assets, or more specific, the underlying real estate portfolio of BlockEstate. There will therefore never be token inflation, as seen with multiple projects in the past, which used their native tokens as emissions, effectively diluting token holders. The BlockEstate reward system incentivizes users to stake their tokens, as it provides them with a steady income stream in $USDC. A $BEH holder will not be forced to lock their tokens. Once your tokens are staked, you will see continous reward emissions. You can ALWAYS withdraw your tokens, whenever you want! Just keep in mind, as soon as you do, the rewards stop coming in!

To illustrate, lets consider an example.

Toki, a BlockEstate user, decides to stake his 50.000 $BEH. He interacts with the staking smart contract, which stores his tokens until he withdraws them. During this time, the projects generates quarterly revenues of 35.000 $USDC. Toki, along with other stakers, receives a portion of these 35.000 $USDC proportional to his staked amount of $BEH. If Tokis stake represents 1% of all staked tokens, he would receive 350 $USDC as his reward, given he stakes his tokens for the full three months time period.

The staking smart contracts of BlockEstate also include considerations to ensure fairness and security. For instance, there is a NO minimum staking period or amount to prevent users from constantly staking and unstaking to game the system. However, the system is ungameable in this regard, because the staking rewards are distributed over the course of three months. Users that want to receive their whole respective share of these rewards, need to stake their $BEH tokens for the full duration of three months. Each day the $BEH tokens remain staked, the rewards will acrue the token staker. Users that unstake their tokens earlier, will receive less. If we use our example from above: If people withdraw their $BEH (the total amount of staked $BEH decreases), the remaining stakers will receive more rewards, as the total reward pool is divided by less stakers.

Additionally, the contracts are public, constantly tested and will be audited by a third-party security firm to ensure they are free from any vulnerabilities.

Right now, the staking contract is live on a forked mainnet for a controlled testing environment, named BEH Testnet. We welcome everyone to participate in beta testing our staking contracts! Hop on our Discord server, navigate to the #dev-updates channel and follow the instructions!

At this point, we would like to thank our developer Niera, who wrote the BlockEstate staking contracts from scratch and happily answers questions about the technical details in our Discord server!

Check out his work at https://github.com/BlockEstate

TL,DR

BlockEstates staking smart contracts provide a secure and efficient way for users to earn rewards by staking their tokens. They are a key component of the BlockEstate ecosystem, incentivizing user participation and contributing to the platforms overall security.

The rest is here:

Understanding the Smart Contracts of BlockEstate: A Deep Dive into ... - Medium

The chief selling point of layer-2 blockchains built atop Ethereum aside from increased throughput is security. Ideally, it should be faster and cheaper to interact with L-2s, but also as safe to transact as using Ethereum.

Unsurprisingly, in practice its complicated and not always black and white.

Security, in this context, refers to the settlement guarantees on Ethereum mainnet. That translates to how certain a user can be that their L-2 transactions will be finalized correctly without censorship and whether assets remain safe from being stolen by the more performant layer-2.

Were not talking security from smart contract bugs at the level of applications (its not about avoiding exploits or rugpulls), but whether the Ethereum Virtual Machine runs the code and reconciles its state per specifications.

Theres not a universally accepted definition of what it means to be secured by Ethereum. According to Louis Guthmann, ecosystem lead at StarkWare, a key feature of assessing whether an L-2 is secured by Ethereum, is the existence of an escape hatch a way to permissionlessly exit with ones assets back to Ethereum mainnet.

A layer-2 requires a mechanism that allows itself to resolve its challenges using the main chain, Guthmann told Blockworks.

Data aggregator L2Beat defines a layer-2 as a chain that fully or partially derives its security from [Ethereum mainnet] so that users do not have to rely on the honesty of L2 validators for the security of their funds.

It provides a handy risk analysis framework for keeping track of various L-2 options. Projects are ranked by total value locked (TVL), not security, but the framework compares all active layer-2s across a spectrum of security-related criteria.

Of these, the state validation method is what L2Beat deems most important because that is how the chain ensures that L2 validators cannot cheat and include invalid transactions in a L2 block, e.g. mint coins out of thin air or steal your coins, according to the sites FAQ.

Validation occurs through either validity proofs (also known as ZK proofs) or fraud proofs (also known as fault proofs).

A zero-knowledge proof is a cryptographic technique used in layer-2 rollups to verify the correctness of a transaction or computation without revealing any sensitive information.

Imagine you have a treasure chest with a secret combination lock, and you want to prove to your friend that you know the correct combination without actually telling them the numbers. With a zero-knowledge proof, you can demonstrate conclusive that you can open the chest and thus have the combination, without actually disclosing the sensitive information.

Fraud proofs are an alternative way to detect and prevent malicious activities or errors in the transaction processing on a rollup. It ensures that the transactions executed off-chain are honest and accurate.

A fraud or fault proof on Ethereum mainnet acts like a referee who checks the moves of a chess game to make sure they are valid. If anyone tries to cheat or submits an incorrect game state, fraudulent of faulty action wont be accepted.

Data availability refers to whether transaction data is stored on Ethereum mainnet the most secure or elsewhere.

Combining these two, we have four widely accepted varieties of Layer-2s. Per L2Beat:

Each of these varieties entails tradeoffs, and some may be more suited to specific use cases than others.

The first zk proof-based rollup was Loopring, which launched a dex back in February 2020. But it has stagnated in recent years, L2Beat data shows, processing about one transaction every 10 seconds, while the chains TVL has fallen 88% from its 2021 peak, and consists of over 50% LRC the chains own native token.

A new focus on its smart wallet and gaming initiatives remains.

The first optimistic rollups to hit mainnet were Arbitrum (ARB), launched in August 2021 and Optimism (OP) followed in December 2021.

Both took up the secured by Ethereum mantle through the mechanism of fraud proofs. According to Optimism developer OP Labs, fault proofs is a more accurate term.

The system isnt always detecting fraud, the majority of the time its just fault (i.e. a node wasnt synced and it agrees with an incorrect output root, etc.), an OP Labs spokesperson told Blockworks. But L2Beat uses the more common fraud proof and they are conceptually interchangeable.

The difference initially was in the details of the fraud proof implementation. Optimism opted for a simpler single-round proof design, while Arbitrum developer Offchain Labs preferred interactive proofs.

A subsequent audit of Optimism by security researcher Yoav Weiss showed in March 2022 that single-round fraud proofs are hard to secure, for which he received a retroactive grant from the Optimism team.

If fraud proofs become too complex, they could make full decentralization too risky, Weiss wrote. A malicious sequencer could corrupt and rugpull the entire rollup if it can make an unprovable state transition.

The sequencer is a key component of rollups responsible for transaction ordering and can be centralized or decentralized, but todays examples are predominantly centralized.

Optimism switched to an approach more similar to Arbitrums, in its cannon release, although Ben Jones, director at the Optimism Foundation, told Blockworks the vulnerabilities were not the driver for us changing course.

It is true though that some flexibility is limited, and our decision to pioneer the first EVM equivalent L2 codebase made that flexibility and modularity more important than ever, Jones said. This was the main driver, alongside research breakthroughs resulting from the development of cannon.

Of the two major optimistic rollups by TVL and activity, only Arbitrum has implemented fraud proofs. That has been a major point of contention between the two teams over security claims, with Offchain Labs co-founder Steve Goldfeder going so far as to analogize Optimisms current status to building cars without engines but then trying to sell one by putting a sticker on it that says very powerful engine.

Optimisms recent Bedrock upgrade introduced a number of improvements, but fault proofs were not among them. Jones didnt specify a timeline, but said fault proofs are a key priority on our decentralization roadmap.

We are aiming towards reaching [L2Beats] Stage 2 decentralization as quickly as possible, and in our view, Stage 2 requires multiple implementations of the fault proof.

L2Beat released its framework of stages earlier this month, building upon Ethereum co-found Vitalik Buterins proposed milestones. It notes the stages focus on decentralization maturity which is not necessarily directly analogous to security although there are clear parallels.

Bedrock now has multiple execution clients, a unique feature Jones said, that is paving the way for multiple [fault] proofs.

And the OP Stacks superchain concept isnt limited to fault proofs, but can include zero-knowledge proofs as well. The Optimism Foundation recently put out a request for proposal to develop exactly that, encouraging teams such as Mina protocols O(1) Labs to complete its design.

Jones says a successful candidate will improve composability between superchains in addition to providing redundancy.

A very important note on this RFP is that it is for the same exact state machine which the fault proofs run, Jones said. This means that having a ZK-secured chain will not require sacrifices to EVM equivalence.

Starkwares Guthmann said having more adoption of zk as their underlying proof system is very exciting for the ecosystem its more investment more research and hopefully more efficient provers and infrastructure for blockchain to develop.

He views L2Beats concept of Stage 0-2 rollups as a bit too strict.

To reach Stage 1, a rollup must have deployed a complete and functional proof system, with at least five external actors who can submit fraud proofs, and users must be able to exit to Ethereum mainnet without the help of the permissioned operators.

Stage 2 future requires the rollup becomes fully managed by smart contracts, with a permissionless fraud proof system anyone can submit a proof and at least a 30-day timelock for system upgrades, giving users ample time to exit.

This goes back to the notion of an escape hatch.

The gap from 0 to 1 is tremendous, Gutmann said. And even from 1 to 2 is unrealistic for any L-2 thats going to have a governance, because basically number two assumes that youre never going to upgrade your system, which is problematic, he said.

Jones said permissionless withdrawals are insufficient to be secured by Ethereum, if there is still a multisig which can unilaterally break security properties.

Multi-signature wallet schemes are frequently used to manage the upgradability of smart contracts.

The ability to withdraw to L1 to another environment is what makes them more interesting as a scaleability solution where you keep self-custody, Gutmann said. Governance of a system relies on some kind of upgradeability, whether its Ethereums social consensus process, or proof-of-stake token voting, or a multisig controlled by a smaller group.

Its fundamentally a question of where chains fall on the decentralization spectrum and Gutman said zero-knowledge tech enable scaleability gains to come without undermining decentralization.

Of the major rollups, only Arbitrum has reached Stage 1. (Decentralized exchange dYdX is listed based on its deployment on Starkwares StarkEx system, but it will soon migrate to a Cosmos-based sovereign rollup.)

Gutmann thinks that classification is fully justified. Theyre doing much better than any of the other teams combined, he said.

But ultimately, he expects zero-knowledge tech to become the standard on both a security and scalability basis.

There is a difference between Optimism and their lack of fraud proofs, and zkSync and what Starkware does. There is a difference of technological advancement.

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So your layer-2 is secured by Ethereum what does that mean? - Blockworks

PRESS RELEASE

Published June 30, 2023

Executive Summary

RUG GPT is a state-of-the-art tool that leverages the power of OpenAI's GPT technology to conduct robust audits of Ethereum-based Solidity contracts. This tool provides fast and reliable analysis, enabling users to make informed decisions about their involvement in a token. With a revenue model that facilitates token buybacks and operational costs, RUGGPT stands as a pillar of reliability and security in the blockchain community. This document elaborates on the conception, development, and future plans of RUG GPT, including the development of an Ethereum-focused escrow tool. Introduction

In the ever-evolving world of blockchain technology and cryptocurrency, smart contracts have revolutionized the way we engage in digital transactions. However, with the increase in smart contract utilization, the need for reliable and thorough contract audits has become paramount. Missteps in contract security can lead to substantial asset loss and credibility damage. RugGPT emerged to address this challenge, providing users with comprehensive, trustworthy analysis of Solidity contracts.

Problem Statement

The current landscape of blockchain technology presents a myriad of challenges, including risky contracts, the potential for fraudulent activity, and the complexity of understanding and evaluating smart contract safety. Identifying secure investment opportunities in tokens is a time-consuming and often technically challenging process that can dissuade potential investors and undermine the growth of legitimate projects.

Solution Overview

RugGPT tackles these challenges head-on. By utilizing the power of OpenAI's GPT technology, RugGPT can scrutinize Ethereum-based Solidity contracts thoroughly, offering valuable insights about their security and reliability. With its speed and precision, RugGPT empowers users to make safer and more informed decisions about their token investments.

Technical Details

RUG GPT integrates OpenAI's advanced GPT technology, which uses machine learning to understand and evaluate the solidity contracts. This artificial intelligence model performs a comprehensive audit, identifying potential security flaws and assessing the overall quality of the contracts. It offers scores and analyses to provide users with a nuanced understanding of the contract's integrity Benefits and Use Cases

RugGPT is a boon to both developers and investors. Developers can use it as a preliminary auditing tool to identify and rectify potential vulnerabilities, enhancing their project's security before launching. Investors, on the other hand, can use RugGPT to evaluate investment opportunities and understand the risk associated with each token, enabling more informed decision-making.

For mroe information, please visit https://ruggpt.io/

Media Contact Company Name: Sverre Jensen Contact Person: Media Relations Email: Send Email Country: Sweden Website: https://ruggpt.io/

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RUG GPT: Empowering Audits, Enhancing Decisions, and Ensuring ... - Digital Journal