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The Protocol: Solana's Missed Moment, Exclusive Farcaster Q&A, Bullish Year of Dragon

Even in a slow week ahead of the Chinese New Year, there's a lot of crypto news to cover. Here's this week's The Protocol, CoinDesk's weekly newsletter devoted to blockchain tech.

by Bradley Keoun|Edited by Bradley Keoun

Updated Mar 9, 2024, 5:48 a.m. Published Feb 7, 2024, 7:15 p.m.

Honestly, we do try to keep things tight here in The Protocol newsletter. The problem is, there's just so many good stories in crypto. That's true even on a slower week as many of our readers and developers in Asia head toward the Chinese New Year on Feb. 10. (The "year of the dragon" is supposed to be bullish, by the way.)

In this week's issue we've got:

EXCLUSIVE Q&A with Farcaster's Dan Romero on the decentralized social network's new "Frames" feature
Solana falls shy of one-year uptime anniversary
Theta Capital's "bold predictions" from Celestia's Nick White and Framework's Vance Spencer
Ethereum's Dencun debut on Holesky testnet
Top picks from the past week's Protocol Village living column of blockchain project updates, grants and other news
More than $50M of blockchain project fundraisings
EigenLayer's TVL, Ethereum's dogwifhat, Prometheum's pick, frozen XRP

This article is featured in the latest issue of The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday. Also please check out our weekly The Protocol podcast.

Network news

Screenshot showing Tuesday's outage on Solana. (Status.solana.com)

SOL CRUSHING. It was supposed to be a cause for celebration: On Feb. 25, the Solana blockchain would complete a full 365 days without an outage – seen as a remarkable milestone given its historic jankiness. So notable it was, in fact, that analysts at Coinbase Institutional called it out in a report last week: "Solana is fast approaching its first full year mark without any downtime, showcasing its significant ecosystem progress, especially when compared to an early history of crashes that halted the chain for days at a time." But the anniversary was not to be. On Tuesday, some 20 days shy of the mark, Solana went down for nearly five hours, in what one blockchain validator described as "performance degradation." According to the website status.solana.com, "Core contributors are working on a root cause report, which will be made available once complete." CoinDesk columnist Daniel Kuhn noted that even as Solana's top developers, led by co-founder Anatoly Yakovenko, promote the blockchain as a top contender in the race for relevance, they have continued to describe the project as being in "beta." After Tuesday's outage, such a descriptor might seem fitting. On the social-media platform X, fans of rival projects from Ethereum to Cardano and even Litecoin and VeChain were quick with the jabs. The prediction market Polymarket posted what appeared to be a betting forum on whether Solana would "go down again in February," with 89 cents on "no" and 11 cents on "yes."

BOLD PREDICTIONS: Theta Capital, which manages a fund-of-funds program for crypto-native venture capital, gave CoinDesk an exclusive advance peek at its "Satellite View" report compiling blockchain predictions from 20 top investors, founders and institutional chieftains. According to the report, the compilation keys off Theta Capital's annual Legends4Legends conference, which raises money for Alternatives4Children (A4C), a "charitable foundation established in 2011 in the Netherlands supporting small-scale educational projects with high impact potential." It runs 60 pages, and goes into a lot of depth on market and regulatory trends, but here are some of the boldest predictions for blockchain tech:

Nick White, COO, Celestia Labs: "We'll see over 10,000 layer 2s deployed in 2024."
Evan Fisher, founder and managing partner, Portal VC:"We predict new protocols built on top of Bitcoin will grow to $50 billion of cumulative market cap over the next one to two years."
Vance Spencer, co-founder, Framework Ventures: "Maker will become the central bank of crypto and surpass $1 billion in earnings in the next two years."
Jason Kam, founder, Folius Ventures: "The Asia developer landscape is looking even more bullish to me than previously thought, mainly brought forth by the BTC layer-2 narrative (driven mainly by miners), as well as another wave of mostly gaming developers hitting the market due to another round of adverse government policy on the entertainment industry."

ALSO:

The final dress rehearsal for Ethereum’s upcoming Dencun upgrade – and the introduction of "data blobs" thanks to "proto-danksharding" – occurred Wednesday, as the blockchain's biggest changes in almost a year took place on the Holesky test network. (Link)
The U.S. Energy Information Administration (EIA) announced plans to conduct a provisional survey of electricity consumption data from cryptocurrency mining companies, drawing criticism from the community. (Link)
Craig Wright denies forging evidence on Day 2 of U.K. "COPA" trial that could lay waste to his controversial claim that he is the father of cryptocurrency. (Link)

Protocol Village

Top picks of the past week from our Protocol Village column, highlighting key blockchain tech upgrades and news.

Ethereum Name Service (ENS), a domain name protocol that runs atop of Ethereum, reached an agreement with GoDaddy to allow users to link internet domains to their ENS addresses for free. “Beyonce owns Beyonce.xyz, and now she can set up a wallet just by going into the GoDaddy page and entering your address,” Nick Johnson, the founder of ENS, told CoinDesk as an example. “Now Beyonce.xyz is her wallet identifier for all intents and purposes.”
Citrea, incubated by Chainway Labs and billed as "Bitcoin's first ZK rollup," emerged from stealth. As reported by CoinDesk Turkiye: "Ekrem Bal, co-founder of Chainway Labs, stated that they have made important progress with the verification of the groth16 proof of this technology on BitVM in 20B cycles, and emphasized that this progress represents an 'amazing milestone' for the Bitcoin ecosystem."
Luganodes, provider of aninstitutional-grade staking service, is "bringing its muscle" to Stacks, a Bitcoin layer-2 network,according to the team. Luganodes will also be a Signer on the upcoming Nakamoto upgrade, solidifying its commitment to the Stacks ecosystem." According to a blog post, Luganodes "ranks among the top validators on Polygon, Polkadot, Sui and Tron."
Pyth, a blockchain oracle project, announced the future deployment of Pyth Entropy, "aimed at enhancing on-chain random number generation across various Web3 verticals such as prediction markets and GameFi,"according to the team.
Voi Network has been launched by veteran members of the Algorand proof-of-stake blockchain ecosystem, as a new iteration of the open-source code, according to the team. The project disclosed in December that it was backed by Arrington Capital, an original investor in Algorand, as well as Sonic Boom Ventures, founded by former Algorand Inc. CEO Steve Kokinos.

See the entire Protocol Village list from this past week here.

How to Expand a Social Network Beyond Nerds: Q&A With Dan Romero

Dan Romero quit his job at the big U.S. crypto exchange Coinbase five years ago to help found Farcaster, described in the project's own documentation, as a "sufficiently decentralized social network built on Ethereum."

Farcaster's launch was sufficiently notable to attract a sizable population of blockchain developers and crypto fans as users of the platform – who gravitated toward the idea of a decentralized version of Twitter, now X. It didn't hurt that Ethereum co-founder Vitalik Buterin signed up as a user of Farcaster's Warpcast app, and has made regular posts.

But what has vaulted Farcaster to the center of Crypto-Twitter conversations over the past couple weeks is the project's release on Jan. 26 of its new "Frames" feature – essentially allowing apps to run within posts, so users don't have to click off to another site. According to a dashboard on Dune Analytics, average daily users on Farcaster has shot up from fewer than 2,000 as recently as late January to now nearly 20,000.

CoinDesk's Jenn Sanasie interviewed Romero this week about Farcaster, the new functionality, and what it's like to break out. A video is here, and the following is an edited transcript.

Click here for the full Q&A with Dan Romero by CoinDesk's Jenn Sanasie

Money Center

Fundraisings

Mobile payments app Oobit raised $25 million in a Series A funding round, the company said Monday.
Nibiru Chain, a developer-focused Layer-1 chain, has raised $12 million funding from Kraken Ventures, ArkStream, NGC, Master Ventures, Tribe Capital and Banter Capital to accelerate its ecosystem growth, according to the team.
Omega, aiming to launch "Bitcoin Web3 infrastructure," has announced $6M in funding from investors including Lightspeed Faction, Bankless Ventures and Wave Digital.
Truflation, a provider of verifiable economic data thatmakes data available on-chain via Chainlink, has closed a funding round, raising $6 million from leading crypto investors,according to the team.
Glif, one of a longtime Filecoin ecosystem contributors, has raised $4.5 million in seed funding from Multicoin Capital and other VCs to build out its tools for earning yield on FIL, Filecoin’s “gas” token that pays for data storage and retrieval on the network.

Deals and Grants

Multicoin Capital Is in Talks to Sell Roughly $100M FTX Bankruptcy Claim: Source
Why Gitcoin, Crypto’s Most Altruistic Project, Is Going Corporate
Radix has launched a 25 million XRD Ecosystem Fund to accelerate the growth of its builders' community, according to the team: "Currently worth over US$1 million, the fund will support new activities, rewards and grants to developers and entrepreneurs in the ecosystem.

Data and Tokens

Regulatory and Policy

Data Corner

https://messari.io/report/discussion-does-ethereum-need-a-new-narrative

Calendar

Feb. 20: Stellar upgrade for Soroban smart contracts, public network readiness date.
Feb. 22-24: Bitcoin++, Buenos Aires.
Feb. 23-March 3: EthDenver.
March 12-13: Sub0 Asia, Polkadot developer conference, Bangkok
March 18-20: Digital Asset Summit, London.
April 2024 (estimate): Next Bitcoin halving.
April 8-12: Paris Blockchain Week.
April 18-19: Token2049, Dubai.
May 9-10: Bitcoin Asia, Hong Kong.
May 29-31: Consensus, Austin Texas.
June 11-13: Apex, the XRP Ledger Developer Summit, Amsterdam.
July 8-11: EthCC, Brussels.
July 25-27: Bitcoin 2024, Nashville.
Sept. 19-21: Solana Breakpoint, Singapore.
Sept. 30-Oct. 2: Messari Mainnet, New York.
Oct. 21-22: Cosmoverse, Dubai.
Nov 12-14, 2024: Devcon 7, Bangkok.

The Protocol Newsletter Ethereum Protocols Solana Farcaster

Bradley Keoun

Bradley Keoun is CoinDesk's managing editor of tech & protocols, where he oversees a team of reporters covering blockchain technology, and previously ran the global crypto markets team. A two-time Loeb Awards finalist, he previously was chief global finance and economic correspondent for TheStreet and before that worked as an editor and reporter for Bloomberg News in New York and Mexico City, reporting on Wall Street, emerging markets and the energy industry. He started out as a police-beat reporter for the Gainesville Sun in Florida and later worked as a general-assignment reporter for the Chicago Tribune. Originally from Fort Wayne, Indiana, he double-majored in electrical engineering and classical studies as an undergraduate at Duke University and later obtained a master's in journalism from the University of Florida. He is currently based in Austin, Texas, and in his spare time plays guitar, sings in a choir and hikes in the Texas Hill Country. He owns less than $1,000 each of several cryptocurrencies.