Tag: distributed computing

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Miners flee to Ethereum Classic as ‘the Merge’ arrives

The Merge, the long-awaited software upgrade that promises to make Ethereum transactions a lot greener, is expected to put miners out of jobs. But miners are not quitting outright. With big bucks invested in computing hardware, many of them are seeking refuge in an alternative branch of Ethereum.

Ethereum Classic, a hard fork of the Ethereum network, saw its hash rate soar to a record high on Thursday morning shortly after the Merge was completed. Hash rate is the computational power used to approve transactions on a blockchain, a mechanism called proof-of-work. Following the Merge, Ethereum is switching to a consensus method called proof-of-stake. Instead of competing with powerful computers and essentially chips, node operators stake their cryptocurrencies to win the chance to validate transactions.

Ethereum Classic, which trades as ETC, grew out of an ideological rift within the Ethereum community. In 2016, the Ethereum Foundation underwent a hard fork to reverse a significant hack that involved $150 million of investor funds. The other version of the fork, which became Ethereum Classic, kept the hack in order to preserve the immutability proposed by blockchain technology.

Aside from keeping the network’s ledgers pristine, Ethereum Classic also continues to practice the PoW method, attracting miners made redundant by the mainstream Ethereum (ETH). But the classic blockchain is far less popular than Ethereum today. ETC is currently the 17th largest cryptocurrency with a market cap of just around $5.3 billion, while ETH is hovering around $195 billion.

Nonetheless, miners are piling into ETC, which might undermine some of the environmental benefits of the Merge. As James, who has been mining since 2017, said: “ETH is an abandoned project by the ETH foundation and we are the abandoned miners. Rigs are invested and facilities are set up with nowhere to go. The only viable option at the moment is Ethereum classic.”

“Miners did not stop mining, they just shift to other options to mine. Energy consumption continued,” he added.

Mining was a hugely lucrative business for those who got in early. Bitmain, the world’s largest crypto equipment maker, was racking up a net profit of nearly $1 billion in the first half of 2018 as demand soared. The gold rush has unintended consequences, too, as its reliance on computational power exacerbated the global chip shortage over the past few years.

The U.S. is the world’s largest source of hash rate today with China coming in second, according to research from the University of Cambridge. China was for a long time the world’s top mining hub before Bejing imposed a blanket ban on the industry it deemed polluting and obsolete. Its share of Bitcoin hash rate accounted for up to 90% of the world’s total in September 2020 before crashing to zero following the crackdown in July 2021, but the number has since rebounded as many miners are believed to have resumed work in a more discreet manner.

‘The Merge’ could be good news for China’s Ethereum enthusiasts

Miners flee to Ethereum Classic as ‘the Merge’ arrives by Rita Liao originally published on TechCrunch

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How the upcoming Ethereum Merge could change crypto’s rewards, costs and reputation

Ethereum, the second-largest blockchain by market cap, is about to undergo a massive transformation known to the crypto community as “the Merge.”

It’s a long-awaited systemwide upgrade that experts say will reduce the blockchain’s energy consumption by about 99% by switching its transaction verification system away from “proof-of-work,” which relies on crypto “miners” using massive amounts of computing power to validate transactions.

After the Merge, Ethereum will use a “proof-of-stake” system that instead uses an algorithmic lottery to determine who gets to validate transactions (and win tokens as a reward for doing so) out of a pool of “stakers” who temporarily deposit their coins to help secure the network.

Crypto’s environmental impact has long been a point regulators and the public count against it — a single Ethereum transaction, for example, consumes about as much energy as an average U.S. household does during a full workweek, Fortune reported last year. That’s part of why Vitalik Buterin, Ethereum’s most visible founder, has been laying the groundwork for the Merge since as early as 2014.

The upgrade was meant to take place in 2016 but kept getting pushed back by the Ethereum Foundation, the nonprofit that helps maintain the Ethereum blockchain. It seemed like it would finally occur earlier this summer and then was pushed back yet again.

It appears the Merge is finally going to happen on September 15, now that testing has been completed. But despite the longstanding discourse about it, there are still plenty of misconceptions floating around regarding what will actually happen during the Merge.

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How did this tiny startup put live, moving, people into a full-blown 3D landscape, instantaneously?

Jumping into a flatpacked, chipboard room wasn’t my usual experience of the UK’s legendary Glastonbury Music Festival. But here I was, doing my best to dance around and test out this crazy new way of putting myself into the so-called Metaverse. It turned out to be a legit experience, as Bristol, UK-based startup Condense, showed me how my badly-dancing body had been instantaneously transported into a full-blown 3D landscape. What didn’t compute, at least for me, was how they’d done it so fast. Not just fast, but literally live.

What Condense has come up with is very interesting. A ‘volumetric’ camera capture and streaming process that – the company claims – can live-stream any kind of human activity (music, sports etc) into a 3D environment, which an be put into a simulation, such as a game, mobile app or platform. And it can be created with Unity or Unreal Engine.

Crucially, to consume it, you don’t need a VR headset to watch it, because the video is streamed live, as a three-dimensional “real-world” video. In Glastonbury, I saw it basically live. The process I witnessed with my own eyes was basically instantaneous.

Condense has now raised a $4.5 million early stage funding round led by LocalGlobe, 7percent Ventures, and Deeptech Labs. Also participating were angels including Tom Blomfield (ex Monzo founder), Grace Ladoja MBE and Ian Hogarth (former Songkick founder).

Condense’s idea is that fans can attend gigs or sporting events with friends, get up close to the action, while artists can respond in real-time, giving shout-outs etc. All I all know is that this rarely happens in a live scenario these days.

“Hundreds of millions of people are hanging out in immersive 3D platforms like Roblox, Rec Room, Fortnite, Sandbox, Decentraland, and VRChat, attending virtual events, socializing, and being creative. At the same time, player demand for live entertainment inside these virtual worlds has never been greater. Condense has built the infrastructure to connect the two,” said Ziv Reichert, partner at LocalGlobe, in a statement.

Condense’s CEO and co-founder Nick Fellingham added: “The Video 3.0 infrastructure we’ve built takes out the technical complexity of streaming live into the metaverse, so people are free to put their creativity in. Video 3.0 is going to change not just how we experience live events online, but fundamentally how we engage with each other.”

To illustrate, here’s video of Grove performing live, captured by Condense.

Condense will now also launch a Metaverse studio in partnership with Watershed, Bristol’s cultural cinema and creative technology venue.

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The “D” in DAO doesn’t stand for democracy, says Upstream CEO Alexander Taub

Ever since a group of chronically-online crypto enthusiasts tried to buy a copy of the U.S. Constitution in a high-profile bidding war, DAOs (decentralized autonomous organizations) have been at the forefront of discussion in the web3 world. How are they different from companies, you ask? DAOs have been lauded for their ability to give everyone in a community a voice by involving them in decision-making and recording those decisions in a transparent, immutable manner on the blockchain. But the utopian vision some people have for DAOs seems far off from the reality today.

This week on Chain Reaction, the TechCrunch podcast about all things web3, we talked with Alexander Taub, CEO and co-founder of DAO tooling platform Upstream. Upstream started as an online community for professionals to connect with each other during the pandemic and pivoted to providing mechanisms to manage DAOs when the blockchain-based communities took off during crypto’s bull run in 2021.

You can listen to the full episode below:

While some see DAOs as a catch-all solution, Taub argues that there are a few use cases for the structure that make sense today while others aren’t as clear. Taub cited investment clubs, where people pool money to purchase a digital asset, and NFT projects looking to give back to their communities as some of the most intuitive use cases for DAOs.

“DAOs, blockchain — it’s programmable money. That’s really what it is. So you can program money to do what you want it to do. Not everything, not every community, requires money. If I want to share cute photos of my dog with other people who want to share cute photos with their dog, I don’t necessarily need any money there,” Taub said.

Taub attributed the DAO’s rise in popularity to the fact that many DAOs have enabled members to make money in new ways, a view that makes sense in light of his example of investment clubs. But as for democratizing decision-making, Taub said it is up to each individual DAO whether or not it will really operate that differently from a centralized corporate entity.

“I think a lot of people look at the word DAO, and they think the ‘D’ stands for democracy. And that’s just not [the case]. People aren’t sitting in a circle singing Kumbaya and being like, ‘oh, we’re all going to do this together.’ That can happen, and that does happen … But that’s just like saying there’s only one way to start a company or one way to launch a project or product,” Taub said.

DAOs, like companies, have unique shareholder voting structures, Taub said. Just because many DAOs strive to give their members an equal say doesn’t mean they are all effective in achieving that goal, particularly when many of them offer voting rights based on the number of tokens each member holds.

“If you want it to be a democracy, great. If you want it to be a dictatorship, people shouldn’t join your DAO if they are not okay with your dictatorship,” Taub said.

You can hear more of Taub’s interview by listening to our latest episode. Subscribe to Chain Reaction on Apple, Spotify or your alternative podcast platform of choice to keep up with us every week.

ConstitutionDAO’s bold crypto bid for US Constitution falls short

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Solana founder Anatoly Yakovenko discusses the crypto downturn at Disrupt

These are turbulent times for both crypto investors and projects alike. Over the past several months, Bitcoin and Ethereum have seen substantial declines in their token prices. But investors have given even bigger haircuts to the breakout success stories of the 2021 bull run. Solana, a newer blockchain with early Silicon Valley backers, has watched its token price drop from $260 in November 2021 to a low of $26 last month.

Despite the aggressive selloff, Solana continues to show signs of adoption as DeFi protocols and NFT storefronts on its network begin to see more action. The platform’s lower fees have attracted developers — the company pegs its unique active monthly accounts at more than 21 million — but the network has still come under fire for lengthy outages.

What does a crypto company do in the face of such a daunting landscape? In Solana’s case, it launched a web3-focused mobile phone. It’s a bold move, and one of the reasons why we’re excited to announce that Solana’s co-founder, Anatoly Yakovenko, will join us for a fireside conversation on stage at TechCrunch Disrupt on October 18-20 in San Francisco.

In a wide-ranging conversation, we’ll talk to Yakovenko about this move toward mobile and its potential appeal to a wider audience versus what it means for hardcore crypto enthusiasts. We’ll ask about the steps Solana’s taking to become the go-to blockchain for decentralized app developers. 

We’re also very curious to get his take on the challenges ahead as the downturn in crypto prices raises concerns about how newly popular networks will keep the enthusiasm building. 

And, just when you might wonder whether a crypto winter is coming, Solana’s investment arm, Solana Ventures, launches a $100 million fund for South Korean web3 startups. 

We have lots of questions, and here’s information about the man who might be able to provide the answers.

Anatoly Yakovenko, the co-founder of Solana, has almost two decades of experience building high-performance operating systems. He led OS development at Qualcomm and held engineering roles at both Dropbox and Mesosphere. Yakovenko has a bachelor’s degree in Computer Science from the University of Illinois Urbana-Champaign. 

TechCrunch Disrupt is back in person on October 18-20 in San Francisco. Early action equals bigger savings. Buy your pass now and save up to $1,300. Student, government and non-profit passes are available for just $195. Prices increase July 29.

 

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Roblox hires former Zynga CTO to build out its developer team

Roblox has picked up a key hire to help grow its ecosystem of user-generated content for the metaverse.

Nick Tornow is joining the company as VP of Engineering for its developer team, leaving his former post as Twitter Platform Lead. Tornow also spent a decade at Zynga and served as the company’s CTO from 2013 to 2018.

At Twitter, Tornow oversaw the company’s tech stack, boosting the company’s speed at shipping new products and expanding its cloud infrastructure, among other projects. At Roblox, he will be tasked with scaling the developer engineering team that manages the toolkit Roblox creators use to build fresh experiences and games for the social platform.

“My goal is to make this into a real engine of growth for the company,” Tornow told TechCrunch. “And everyone wins, you know. The company wins, our developers win, because they’ll get to be able to start businesses and that sort of thing, and our customers win because they get these compelling experiences on the platform.”

While Tornow’s Twitter role focused on internal tools, in the new role at Roblox he’ll have the opportunity to shape the platform’s experience for its more than 50 million daily active users. One area of focus is real-time translation, which can allow Roblox users to cross language barriers seamlessly as they interact across virtual worlds.

“We’re really breaking down those historical barriers around language and automatically translating not just the experiences themselves, but the social interactions within those experiences in real time,” Tornow said. “These are the sorts of things that while we might have envisioned that they might be possible at some point in time, what’s cool at Roblox is that’s actually what’s happening right now.”

Roblox’s current period of growth comes at a time of contraction among many of the company’s peers in the tech industry, which have slowed their growth, frozen hiring or turned to layoffs to ride out a challenging economic downturn that has U.S. stocks bordering on bear market territory.

“We are excited to bring Nick on board as we are aggressively investing in innovation and have one of the broadest sets of exciting technical challenges to solve,” Roblox CTO Dan Sturman told TechCrunch, noting that the company has seen increasing interest from talent at social and consumer companies.

“We are ushering in this new category of human co-experience and expanding our engineering team to go deeper into our core focus areas — Roblox developer community being one of them. We continue building out our offering of new tools and innovative features for developers who are creating immersive shared experiences at a massive scale.”

Roblox pushes toward avatar realism, plans to add NFT-like limited-edition items

How Roblox’s creator accelerator helps the gaming giant build new platform opportunities

 

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Amid crypto’s talent war, Encode Club mints new web3 developers

Crypto-savvy developers are in short supply these days. Blockchain startups and protocols are fighting to onboard and train more engineers — an even tougher undertaking in a world where developing on Ethereum vs. Solana vs. Polkadot vs. another blockchain can require completely different programming skill sets.

London, United Kingdom-based startup Encode Club, founded in 2020, trained 15,000 developers last year alone through its programming, CEO and co-founder Anthony Beaumont told TechCrunch in an interview.

Encode runs workshops, bootcamps and hackathons both online and in-person across the globe with the goal of providing a recruitment pipeline for its long-term partners, which it says include some of the most active blockchain protocols — Avalanche, Polkadot, Solana, and Polygon, to name a few. The company is chain-agnostic in its training, teaching a wide range of programming languages applicable in crypto, including Solidity and Rust, Beaumont said.

The Encode Club team

The Encode Club team Image Credits: Encode Club

Encode’s partners pay the company to make hires directly from its talent pool, Beaumont said. Some also sponsor events that Encode organizes and runs. The startup, which employs 15 people, made $2 million in revenue last year, mainly through six and seven-figure recruitment deals with companies in web3, according to Beaumont.

Over 60 venture-funded blockchain startups, including NFT project 0xmons and Paradigm-backed DeFi protocol Euler Finance, have had their founders participate in Encode’s programs. Although the company is profitable, Beaumont says, it just raised $5 million in seed funding from investors.

Lemniscap and Galaxy Digital led the round alongside Dragonfly Ventures, Folius Ventures, not3Lau Capital, Ascensive Assets, and angel investors including SolBigBrain, Stefan George from Gnosis, Jordan and Kain Warwick from Synthetix, Anton Bukov from 1inch, and Jason Choi, according to Encode.

“We’ve been honestly just overwhelmed for demand for our services, from doing events with us training developers, hackathons and boot camps. Recruitment is a big thing for us these days that we just want to scale up as fast as possible, and fundraising was the way to do that,” Beaumont said.

More than half of participants in Encode’s coding bootcamps, most of whom are experienced web2 programmers looking to pivot into web3, land jobs in crypto upon completion, Beaumont estimated. In contrast, Insider reported that leading coding bootcamp Lambda School has a 30% placement rate — far below what the company officially advertises.

Encode Club co-founder Anthony Beaumont

Encode Club CEO and co-founder Anthony Beaumont Image Credits: Encode Club

Part of Encode’s success, Beaumont said, is due to the fact that it screens prospective bootcamp participants to ensure its students are well-equipped to benefit from its programming.

“We are doing a kind of in-depth interview and filtering process, despite the scale [of the program],” Beaumont said.

Post-program, the Encode team continues to track student outcomes so it can be effective in matching its students with job opportunities, Beaumont added.

“If you go through our program, we kind of have your genome map. We’ve tracked every event you’ve ever done. We will know everything about you, from your GitHub to your LinkedIn to any hackathon project you’ve ever done, so we can really spot talents, give them the attention they need, and then make sure they have a good time and that they go on to achieve great things,” Beaumont said.

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Liquifi is building the “Carta of web3” for companies issuing tokens on the blockchain

Web3 startups’ cap tables can look quite different from traditional ones. Rather than issuing equity as a form of incentive alignment for employees, as a typical startup would, crypto companies often opt to issue tokens that represent ownership. Tokens are an entirely separate asset class with their own complexities, rules, and regulations.

Cap table management software company Carta commanded a $7.4 billion valuation last August for its suite of tools that help companies navigate equity issuance, compensation, and related challenges. While Carta has been around for nearly a decade, there’s a new upstart looking to replicate its model for the nascent cohort of web3 startups, through a focus on token management — LiquiFi.

Because of the relative newness of token-based compensation as a widespread practice, many web3 companies manage their cap tables manually, using custom, in-house systems and spreadsheets, Robin Ji, CEO and co-founder of LiquiFi told TechCrunch.

LiquiFi, part of Y Combinator’s winter 2022 batch, helps startups automate their token vesting, manage their token cap table, and issue token grants in compliance with regulations, Ji said. Ji and LiquiFi co-founder and CTO Oliver Tang recognized the challenges associated with token-based compensation after working at other crypto companies, Eco and Set Labs respectively.

Since its founding last year, the company has gone live on Ethereum and Polygon, and is “quickly expanding to other chains,” Ji said. While he didn’t share the number of customers the company is working with today, he said LiquiFi’s customer list includes both large DeFi protocols and smaller startups that are just launching a token for the first time.

“We definitely have a long list of customers that are about to launch a token, but haven’t onboarded yet,” Ji added.

Token management differs from equity management because of some fundamental differences between the two asset classes, Ji said. Tokens are more dynamic than equity — you can vote with them, stake them, lend them out, and provide liquidity, he continued.

Another key difference is that when traditional equity is transferred, legal papers and agreements serve the purpose of tracking ownership. In contrast, when tokens are transferred, assets move on a blockchain and a transfer of custody takes place, Ji explained. The technology needed to transfer tokens can be complex, sometimes requiring companies to write custom code.

“In a traditional [platform like] Carta, you basically click buttons, work with lawyers to draft agreements, and you send it off for them to sign, and that’s basically the transfer of assets,” Ji said. “But with tokens, there’s that, plus the actual asset that’s being transferred, so the technology piece is one thing … The second piece with tokens is general know-how of compliance and processes.”

LiquiFi helps companies with both aspects. Its product today is geared toward companies that already have their own tokens or are on the verge of launching them. Eventually, though, Ji hopes to add features that can serve customers well before they have launched a token by helping them figure out allocation and distribution strategies that can deliver optimal returns for all the parties involved in an issuance process.

The core product includes a dashboard where customers can see their smart contracts and tokens outstanding as well as tax compliance features. LiquiFi is also working on a product that would allow individuals with locked or vesting tokens to earn additional yield on those tokens while they’re being held — an entirely new capability that no other company had developed previously, Ji said.

The startup announced today that it has raised $5 million in seed funding led by Dragonfly Capital Partners. Nascent, Alliance DAO, 6th Man Ventures, Robot Ventures, Y Combinator and Orange DAO also participated in the round, as well as prominent angel investors in the crypto space including Balaji Srinivasan, Katie Haun, Packy McCormick, Anthony “Pomp” Pompliano, and Anthony Sassano.

LiquiFi plans to use the funding to invest in product development, design, marketing, and sales, Ji said. The company also hopes to hire in-house counsel and build out a recruiting team, he added. In terms of adding compatibility with other blockchains, he said the company plans to start with EVM-compatible ones, namely Solana and Terra, in the near term.

The company’s fundraising process moved fast, Ji said. He hopes the business will be able to continue scaling rapidly.

“The biggest risk for us is just making sure that we are moving as fast as the [crypto] market is moving, because if we don’t, then we’re going to be left behind,” he said.

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Axie Infinity creator raises $150M round to compensate victims of ~$625M Ronin hack

Vietnamese gaming studio Sky Mavis announced that it has raised $150 million in funding led by crypto exchange Binance to help reimburse users who lost funds during a ~$625 million hack of its play-to-earn game Axie Infinity, which was the largest crypto heist to date. Animoca Brands, a16z, Dialectic, Paradigm and Accel, also participated in the raise, according to Sky Mavis.

The new funds will be combined with cash from Sky Mavis’ balance sheet to reimburse all users who lost money in the attack on Ronin, an Ethereum-based sidechain supporting the game. The company plans to reopen the Ronin bridge after a security upgrade and audits, which it says could take several weeks. In the meantime, Binance is providing liquidity for Ronin users by allowing them to withdraw and deposit ETH freely.

Binance is one of the only major crypto exchanges that directly integrates with the Ronin network and allows users to move funds from its platform to a Ronin wallet address. Today’s announcement appears to mark the first time Binance has invested directly in Sky Mavis.

Sky Mavis also addressed the cause of the attack in its announcement, attributing the breach to the “small validator set which made it much easier to compromise the network.” The hacker was able to obtain five of the nine keys used to validate the network, enough to enable them to withdraw tokens from the Ronin bridge into an external wallet. The company said it plans to increase the validator group from five to 21 validators in the next three months to safeguard against future risks.

The company generated $1.3 billion in revenue in the 12 months through February, and Axie Infinity itself has a “community treasury” worth $1.6 billion, Bloomberg reported last week. In the hack, 56,000 ETH tokens (worth around $185,000,000 USD at today’s prices) from the treasury were compromised — funds Sky Mavis say will remain uncollateralized as the company works with law enforcement to recover them. The Axie community would have needed to host a vote to approve liquidating any of the treasury funds to reimburse users, which could explain why Sky Mavis chose to raise external cash and use its own balance sheet instead.

It’s incredibly difficult for funds to be recovered after a crypto hack, let alone returned to users directly. The majority of the funds are still in the hacker’s wallet, though the hacker appeared to move some 2,000 ETH out of the wallet to privacy tool Tornado Cash, which allows users to mask their wallet address while withdrawing funds.

Axie Infinity has 2.2 million monthly active players, and according to the company, is the most-played NFT game of all time. Sky Mavis last raised a $152 million Series B in October 2021, led by a16z alongside other venture firms including Paradigm and Accel, all three of which participated in today’s fundraise.

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Axie Infinity creator raises $150M round to compensate victims of ~$625M Ronin hack

Vietnamese gaming studio Sky Mavis announced that it has raised $150 million in funding led by crypto exchange Binance to help reimburse users who lost funds during a ~$625 million hack of its play-to-earn game Axie Infinity, which was the largest crypto heist to date. Animoca Brands, a16z, Dialectic, Paradigm and Accel, also participated in the raise, according to Sky Mavis.

The new funds will be combined with cash from Sky Mavis’ balance sheet to reimburse all users who lost money in the attack on Ronin, an Ethereum-based sidechain supporting the game. The company plans to reopen the Ronin bridge after a security upgrade and audits, which it says could take several weeks. In the meantime, Binance is providing liquidity for Ronin users by allowing them to withdraw and deposit ETH freely.

Binance is one of the only major crypto exchanges that directly integrates with the Ronin network and allows users to move funds from its platform to a Ronin wallet address. Today’s announcement appears to mark the first time Binance has invested directly in Sky Mavis.

Sky Mavis also addressed the cause of the attack in its announcement, attributing the breach to the “small validator set which made it much easier to compromise the network.” The hacker was able to obtain five of the nine keys used to validate the network, enough to enable them to withdraw tokens from the Ronin bridge into an external wallet. The company said it plans to increase the validator group from five to 21 validators in the next three months to safeguard against future risks.

The company generated $1.3 billion in revenue in the 12 months through February, and Axie Infinity itself has a “community treasury” worth $1.6 billion, Bloomberg reported last week. In the hack, 56,000 ETH tokens (worth around $185,000,000 USD at today’s prices) from the treasury were compromised — funds Sky Mavis say will remain uncollateralized as the company works with law enforcement to recover them. The Axie community would have needed to host a vote to approve liquidating any of the treasury funds to reimburse users, which could explain why Sky Mavis chose to raise external cash and use its own balance sheet instead.

It’s incredibly difficult for funds to be recovered after a crypto hack, let alone returned to users directly. The majority of the funds are still in the hacker’s wallet, though the hacker appeared to move some 2,000 ETH out of the wallet to privacy tool Tornado Cash, which allows users to mask their wallet address while withdrawing funds.

Axie Infinity has 2.2 million monthly active players, and according to the company, is the most-played NFT game of all time. Sky Mavis last raised a $152 million Series B in October 2021, led by a16z alongside other venture firms including Paradigm and Accel, all three of which participated in today’s fundraise.