Without Layer 2’s to offload traffic, gas fees for the swap on the Ethereum base chain will exceed $100.

The bull market will throttle itself as the Ethereum base chain will be overpopulated.

But there is good news.

Layer 2 solutions are popping up here and there and people are finally using them.

In fact, daily activities have been outpacing Ethereum mainnet throughout 2023.

Looking at the chart above, red is the transactions on Layer 2s, blue line is Ethereum.

So the question is, when is Layer 2 summer?

Related Reading: What Does The Dollar Milkshake Theory Mean For Crypto?

When is Layer 2 Summer?

Based on the chart, we could assume that Layer 2 summer is already here.

Still, markets don’t really bubble yet.

A lot of building still needs to be done for crypto as the industry reaches some degree of mainstream adoption.

In a recent post, as Ethereum transitions from a young experimental technology into a mature tech stack, there are three major transitions that need to undergo. And the Layer 2 scaling transition is one of them.

The other ones are people moving to smart contract wallets, in which they don’t have to store private keys; and the third is privacy-preserving transitions.

If builders keep building the network and can manage all of the transitions above, a potential Layer 2 summer is predicted to advocate in 2024.

With the support of the Ethereum Improvement Proposal 4844 (EIP-4844) that will go live in Q3 2023, Layer 2 Summer will help to reduce transaction fees on Ethereum by roughly 10x.

Of course, this is good for Ethereum users and benefits Layer 2 users who transact on Ethereum’s base chain.

In this case, a breakthrough application is in need. Everyone is building a base layer technology on which the application can ride.

The question is, what applications will bring the masses in?

It could be a metaverse, a game, a social media platform, etc.

Obviously, in order to attract more users in those Layer 2s, any applications that bring possibilities and potential use cases will count.

Let’s look at some Layer 2s.

List of Layer 2s

Here is the list of top Layer 2s, with the top 4 being Arbitrum, Polygon, Optimism, and ImmutableX.

Among those L2s, Arbitrum and Polygon collect the most meaningful fees.

However, it is noteworthy that not every Layer 2 has a token yet.

Another notable Layer 2 is ZkSync Era – the first Layer 2 on Ethereum with Zero-knowledge technology.

It is among the top list partly because of the expected airdrop and still doing great. Accordingly, ZkSync Era has bet on zero-knowledge technology as the key requirement for onboarding millions of users to Web3.

Related Reading: Game on with zkSync Airdrop

Then, the question is, what is the most profitable L2?

According to a tweet from Delphi Digital, to know which is the most profitable L2, they took the spread between the fee revenue generated by the L2 and the price the L2 pays to the L1, plus the verification costs for zk-rollups.

As a result, Arbitrum turns out to be the most profitable L2.

Let’s dive into the winner of the show!

Impressive Numbers of Arbitrum

Remember the pre-airdrop phase that has been hotter than summer in the second half of March 2023.

Arbitrum is a Layer 2 scaling solution for Ethereum, designed to improve the scalability and performance of the Ethereum network. It is developed by Offchain Labs, a blockchain technology company.

Arbitrum provides developers and users with faster transaction processing, lower fees, and a more seamless user experience while maintaining compatibility with the Ethereum Virtual Machine (EVM).

This means that smart contracts and decentralized applications (dApps) developed for Ethereum can be deployed and run on Arbitrum without requiring any significant modifications.

Arbitrum uses ETH for gas fees on the network.

It is hard to ignore the fact that this is where most people are going. We’ve seen that Trader Joe found its big success when being the first mover to Arbitrum. 

In conclusion, in terms of transaction fees, Arbitrum is the king of Layer 2.

In terms of daily transactions, Arbitrum is almost at par with the Ethereum main chain.

On some days, Arbitrum daily transactions exceed the number of transactions on the main chain.

These statistics have shown that a large number of users have flooded into the Arbitrum ecosystem.

But, the price is not skyrocketing. Why?

There are some reasons, but the current market cycle that doesn’t favor altcoins in general is one.

Related Reading: Top Altcoins 2023 with Potential for Massive Gains

In conclusion

The increased use of L2 solutions shows that a Layer 2 summer is really coming.

Leading Layer 2 solutions include Arbitrum, ZkSync Era, and Optimism, with Arbitrum being impressive in particular.

We should keep an eye on ZkSync Era since it might have an airdrop.

However, for a true summer to really happen in the crypto city, we are still waiting for a breakthrough application on L2s that will catch fire for mainstream adoption.

While it certainly makes us all nostalgic, we are also thrilled that KEYRING PRO already supports WalletConnect V2 as a default integration.

Do you know what the best part is? – it only takes 03 steps to connect.

Before we get into WalletConnect v2, let’s find out about WalletConnect and what V1.0 has done for Web 3.

What is WalletConnect?

Like most other downsides that come along with having too many options in life, there is also the rise of the wallet ecosystem in the Web 3 industry.

While such abundance is essentially a positive moat for the ecosystem,  it poses some negative effects.

Most dApps have not been able to integrate every single wallet that is available, due to native support or a one-size-fits-all system.

WalletConnect came to rescue the transformation for the entire ecosystem.

WalletConnect was founded by Pedro Gomes in 2018, is a Web 3 messaging layer and a standard to connect blockchain wallets to dApps.

Why Use WalletConnect?

“WalletConnect improves wallet-to-dapp interoperability in the web3 ecosystem.”

WalletConnect further strengthens interoperability across EVM chains, while guaranteeing privacy and security.

WalletConnect V1 has done a great job in bringing the ecosystem together, having 300+ wallets and 3000+ dApps integrated and interacting with each other, eventually opening the door to a new world of Web 3 experiences.

WalletConnect V1 ShutDown: What to Expect for WalletConnect V2

As of 2 pm UTC, June 28th, the V1 protocol will be shut down, and all dApps and wallets are to be migrated to WalletConnect V2 mandatorily.

The transition to WalletConnect V2 is fully-agnostic and supports all blockchains out there.

The overall UX between both versions remains consistent.

What Makes WalletConnect V2 Different?

WalletConnect V2 allows any chains to be connected together at once.

With the emergence of many Layer 1 and Layer 2 chains, it has become necessary to switch chains every now and then. Bridging between chains is also quite tedious, as you have to go back and forth.

Wallet Connect v2.0 allows multiple chains and wallets to connect and send transactions simultaneously. There is no need to switch chains.

WalletConnect V2’s key features include:

• Chain-agnostic: interoperable with any blockchain. Out-of-the-box support for new blockchains and roll-ups.
• Multi-chain: connect to wallets with one or more chains simultaneously and send transactions to different chains at the same time.
• Multi-session: manage as many sessions as you need.
• One-time pairing: establish multiple sessions with a single pairing; unlimited sessions are possible with a single connection.
• Reduced bandwidth: web socket management ensures efficient reuse of resources and uninterrupted multiplexing of all messages on a single socket.
• Distributed messaging: message relay now uses the Waku network to distribute messages across all nodes. No need to rely on a central server.
• Authorization system: explicitly requires wallets to be compatible with all signing methods required by Dapp.
• Guaranteed delivery: a smarter caching mechanism ensures message delivery under a wider range of network conditions.
• Platform independence: works anywhere, including desktop applications, browser applications, mobile applications, and gaming applications.

Related Reading: Introducing KEYRING NFT VIEWER: A Simple and Feature-Packed NFT Tool

The WalletConnect V2 Rollout

June 27 at 7 am UTC: Apps Switch to WalletConnect V2.

Apps have a full day ahead in their production deployments to test connectivity and allow for last-minute fixes.

Since wallets are able to support both WalletConnect V1 and WalletConnect V2 in parallel, users of wallets that already support WalletConnect V2 will be able to continue using them from then onward.

However, they must have to update their newest version of mobile wallets that support WalletConnect V2.

The newly improved KEYRING PRO V2.7.0 is Here! Sneak peek at our new features. Smart. Sleek. Powerful.

Related Reading: How to use KEYRING PRO

Users of wallets that only support WalletConnect V1 and users of outdated mobile apps will be unable to connect from this time onward.

June 28th at 2 pm UTC: WalletConnect V1 Bridge Servers Go Offline

At this moment, WalletConnect V1 will cease to operate.

Users of wallets and apps that still only support WalletConnect V1 will encounter connectivity issues.

WalletConnect V2: Update Guide for Wallets and Apps

Wallets

All wallets need to update to the latest version of the relevant WalletConnect SDK to keep up with the fixes that have been released.

The current recommended minimum versions for the WalletConnect v2.0 migration are as follows:

• Swift: 1.5.12 or higher
• Kotlin: BOM 1.9.3 / Core 1.14.3 or higher
• Web3Wallet SDK: js-1.8.0 or higher

Apps

Many apps are taking careful steps to update their SDK ahead of the transition, along with 12 potential migration paths.

KEYRING PRO is one of the first wallets that have already migrated to WalletConnect V2. Check out and connect yourself to experience the easy, breezy WalletConnect V2 experience.

How to Connect with KEYRING PRO via WalletConnect V2

STEP 1: Download KEYRING PRO

KEYRING PRO is a non-custodial wallet for professionals with feature-packed solutions.

The highly secure multi-chain wallet offers complete support for Bitcoin and all EVM chains, along with a best-rate Swap (DEX Aggregator), an exclusive KEYRING Bridge, and especially a payment gateway that allows you to buy crypto with a credit card.

KEYRING PRO is now listed on WalletConnect Explorer after having successfully implemented Web3Wallet SDK.

STEP 2: Go to the page you want to connect to and Select WalletConnect V2 as the connection method

Open the DeFi, NFT Marketplace, NFT Game Browser, other Dapps, or Web 3.0 pages you wish to connect to in the browser of your choice on the device of your choice.

Unlike Metamask, it can connect to browsers such as Safari and Google Chrome as well as smartphone browsers. It works everywhere, including desktop applications, browser applications, mobile applications, and gaming applications.

STEP 3: Scan the QR Code

Some apps may ask you to choose a network before you can scan the QR code.

Once you have selected WalletConnect V2 as the connection method, the following process differs depending on whether you are using a PC or a smartphone.

• For PC browsers: a QR code will be displayed; scan the QR code using the camera function of the app.
• For smartphone browsers: select WalletConnect V2 and you will be connected automatically; you may need to select the wallet app you want to connect to if you have multiple WalletConnect-enabled apps, or if you are using an iPhone (see the image below). In this case, select the wallet app you want to connect to.

KEYRING PRO Takes Off on WalletConnect V2

WalletConnect V2 is going to be a game-changer. How do you think this upgrade will impact the overall Web3 experience?

With the complete migration to WalletConnect V2, KEYRING PRO gives you even more freedom to connect.

It solves problems not only between devices and browsers but also between addresses, chains, and applications, making Web 3.0 easier to use.

Not only can new addresses be created for all chains at once, but EVM networks that can be managed with the same address as Ethereum can be imported together from the same private key.

Click here to find out how to use KEYRING PRO to collectively manage assets on your smartphone.

If you purchased an NFT on a marketplace and don’t know where to find it, or are unsure where to find the NFT info, or maybe question why the NFT was not showing in your wallet, this article is worth reading.

Many people have problems related to the confirmation and management of NFTs.

Obviously, NFTs based on blockchain technology are a very innovative concept, the owners themselves face the challenge of not being able to keep track of their details.

To enhance the NFT ownership experience, it is important to understand how to verify images and details of the NFTs purchased.

Especially now that NFTs are issued from various blockchain networks (chains), the verification and management of NFTs have become more complex.

However, a tool has been created to alleviate such difficulties.

We are thrilled to introduce KEYRING NFT VIEWER, an NFT explorer.

This explorer supports multiple networks and allows you to easily check detailed information such as images and token IDs of NFTs you own at a glance.

In addition, KEYRING NFT VIEWER can be used to transmit NFTs and configure them for the new innovative ERC-6551 standard.

This greatly expands the range of NFT applications and maximizes the potential of NFTs.

This article will explain these steps in detail, from the prerequisite information needed to check the NFT to the actual use of the KEYRING NFT VIEWER.

We hope this information will help you understand and use NFTs.

How to Verify the NFT

In order to verify an NFT, it is important to understand and grasp some prerequisite information.

Knowing this information will enable you to accurately verify the images and details of your NFT.

Below is a detailed explanation of this basic information.

What is an NFT?

Let’s begin with the question, “What is NFT?”.

As far as we have known, non-fungible tokens (NFTs) exist and are verified on public chains, e.g. Ethereum.

On the other hand, NFTs on private, non-public chains cannot be directly verified.

Also, even if you believe you have received an NFT, it may not yet exist on the blockchain (on-chain) due to the nature of the game or digital product. NFTs in such a state cannot be confirmed, as they are not yet technically NFTs.

What NFT Wallets Do You Use to Store NFT?

Next, it is important to understand which crypto wallet to keep all the NFTs you own.

In the requirement of verification, knowing the wallet where the NFT resides and its wallet address is necessary.

What Networks Do You Use For Your NFT?

It is also required to check the blockchain network (chain) on which the NFT was issued.

For example, the NFT was created on chains such as Ethereum, Polygon, BNB Chain, Avalanche, etc.

With these three prerequisite pieces of information in place, it is possible to verify all the details of the NFT, including its image, owner, token ID, and transaction history from the past owner to the current owner.

We will explain the specific steps to deeply understand these essentials and to be able to check the details of your own NFTs.

Introducing KEYRING NFT VIEWER: An Ultimate Tool for NFT View and Information Check-up

What is KEYRING NFT VIEWER?

KEYRING NFT VIEWER is an NFT explorer that allows you to easily view NFT images and information in detail.

With this tool, you can see at a glance the details of the NFTs you own from your own or others’ wallet addresses.

While this can be done on the NFT marketplace, like Opensea, KEYRING NFT VIEWER allows you to view NFT information at a more intuitive and in-depth level due to its specialized nature.

The operation of the KEYRING NFT VIEWER is very simple.

First, if you want to check the NFTs you own, click on “Connect Wallet” in the upper right corner, and connect to your wallet via Metamask or WalletConnect. Then you can view the list of NFTs you own.

Even if you want to check the NFTs of others, simply select the appropriate network from the top page, enter the wallet address, and search. You can easily check NFT information on multiple blockchain networks.

Currently, KEYRING NFT VIEWER supports the following blockchain networks, allowing you to see NFTs on a wide range of networks.

• Ethereum (Ethereum)
• Binance Chain (BNB Chain / Binance Smart Chain)
• Polygon
• Avalanche

By supporting these networks, KEYRING NFT VIEWER enables users to explore and review a wide variety of NFTs, helping them to gain a broader and deeper understanding of their digital assets.

How Does KEYRING NFT VIEWER Work?

KEYRING NFT VIEWER can also control your own NFTs by connecting to your own wallet. To do this, you can use the following two buttons, which appear in the top right corner when you select each NFT.

1. Send NFT: this button allows you to send selected NFTs to another wallet. This allows you to buy, sell or transfer NFTs safely and easily.
2. Deploy TBA: By pressing this button you can convert the selected ERC-721 token to the ERC-6551 standard. After conversion, the ERC-6551 NFT will display the address of the smart contract at the bottom of the screen. By sending tokens and other information here, you can link the sent tokens to the ERC-6551 NFT.

Let’s take a closer look at ERC-6551, a new standard that provides for a Token-Bound Account (TBA) bound to the ERC-721 NFT. This is perhaps easier to understand if you think of it as adding wallet-like functionality to NFTs.

That is, for each existing ERC-721 NFT, it will be possible to create a contract that is directly tied to that NFT, with the ERC-721 NFT acting as a sort of ‘passport’ that allows various digital assets to be transferred in and out.

The TBA can hold native tokens as well as other ERC-721 and ERC-1155 tokens. This means that the TBA works like a wallet and allows basically all operations that a wallet is capable of.

KEYRING NFT VIEWER, therefore, not only plays a role in the operation of NFTs but also in improving the convenience of NFTs, such as the adoption of new standards that have never been used before.

For more information on TBAs and ERC6551, and how to make them using KEYRING NFT VIEWER, please refer to the articles below.

Exploring the Potential: Use Cases of ERC-6551 and Token-Bound Accounts

In Conclusion

In summary, confirming NFTs can be surprisingly difficult. It can be a challenge to get information on which wallet the NFT you bought it in, which chain it is in, and even where you can see pictures and detailed information about it.

With the introduction of KEYRING NFT VIEWER, these problems can now be easily solved. Using wallet links and address look-ups, you can list and check details of NFTs owned by yourself or others. There is also support for the new ERC-6551 standard, which further extends the capabilities of NFTs.

To get a more tangible sense of NFT ownership and expand the scope of its use, please consider using KEYRING NFT VIEWER. This will make the process of checking the NFT easier and more intuitive and open up new possibilities.

Revisiting the definition of the Dollar Milkshake Theory

Brent Johnson once argued that, before 2018, global central banks injected liquidity into the “milkshake” of the global market.

The theory, coined by Brent Johnson, the CEO of Santiago Capital, envisions a scenario where the US dollar sucks up liquidity from other currencies and countries worldwide.

Johnson unpacks a story of a massive flood of central bank liquidity and explains how capital flows are being sucked into US equity markets through the dollar.

In other words, the Dollar Milkshake Theory can be explained simply as: the dollar drinks the other currency’s milkshake, then shoots it in cold blood.

But why would the dollar suck up money from the worldwide capital market?

Isn’t that idea absolute?

Are we in a trend of de-dollarization?

Let’s first have a look at a theme that has been popping up in recent months: the trend of de-dollarization.

Related Reading: Introducing KEYRING NFT VIEWER: A Simple and Feature-Packed NFT Tool

Signs of De-Dollarization

Are countries saying goodbye to the dollar?

Some shifts are indeed happening. China and India are advancing talks to abandon the dollar for their trade. BRICS countries are developing a joint currency.

*What are BRICS Countries? They are Brazil, Russia, India, China, and South Africa. This political union represents 42% of the global population, and 26% of the global GDP, with 12 more countries applying to join. The BRICS group is expected to control a huge amount of global food, energy, manufacturing, and metal production, making it the biggest and the most important political and economic alliance on Earth.

There are some concrete examples of de-dollarization, including:

• Brazil has agreed with China to settle their mutual trade in their currencies.
• Kenya will settle the purchase of oil from Saudi Arabia in its shilling.
• Russia will use the Chinese yuan for trade with Asia, Africa, and Latin America.
• France purchased gas from China with the yuan instead of the dollar for the first time.

This is not so fast going to lead to necessary messages about the dollar.

Many countries would like to see a different balance.

But, take a look at the IMF chart, which monitors the composition of international reserves.

These consist mainly of dollars. In other data, many debts are dominated in dollars.

Where Does The Dollar Milkshake Theory Come From?

The Dollar Milkshake Theory uses a milkshake comparison to illustrate that the dollar (and the US stock market) tend to suck up investors’ funds globally during crises.

Part of the reason is that the world is addicted to dollars even if it might want to detox.

The other reason is the flight to safety that the dollar represents.

Overall, the core problem with dollar addiction is that the world needs dollars to pay off debts in dollars.

Other countries can’t print dollars so it creates extra demand. And this is where the image of the milkshake comes in.

In particular, the FED has created a big milkshake of liquidity since the global financial crisis and the pandemic.

The thing is, what would happen to this milkshake if the American Federal Reserve raised the interest rates?

Imagine if people are sucking the dollars through their straw, but they also need dollars to get some yield, and they have to pay their debt. It means they need dollars on both ends.

Even though the economies outside of the US may end up in a recession, and have less purchasing power in dollars, the dollar’s value still rises because their dollar debt burden gets bigger and bigger.

According to the Dollar Milkshake Theory, the dollar won’t be replaced because of weakness, but because of too much strength.

Related Reading: Polygon 2.0 Unveiled: A Zk-Powered Future

The Dollar Milkshake Theory is a Framework for a Sovereign Debt Crisis

What is the endgame after the dollar has killed all other currencies?

A sovereign debt crisis happens when a country’s government fails to pay its debt obligations.

This is when the authorities might step in and anchor fiat currencies such as gold or Bitcoin.

As a result, the Dollar Milkshake Theory posits that strengthening the US Dollar could be a boon for cryptocurrencies.

Related Reading: How Investors Can Tap Into Derivatives With ETFs

What Does The Dollar Milkshake Theory Imply for Crypto?

Brent Johnson has pointed out that the US government and others have tried their best to demonetize gold.

Accordingly, the Dollar Milkshake Theory brings truth to the world of currency, where the dominant currencies tend to dominate and suck out the energy from the others.

As the dollar becomes more attractive to investors, it could increase demand for alternative assets like Bitcoin, offering a hedge against inflation.

However, are there any negative impacts?

In the scenario of the sovereign debt crisis, it is predictable that investors would likely pull their liquidity from risk assets and park it into safer investments.

Related Reading: How to buy crypto with a credit card

In Conclusion

In Johnson’s vision, cryptocurrencies are nice to add to your portfolio and forget about, owning it for the endgame scenario that might be a while in the future.

The Dollar Milkshake Theory is an interesting theory to consider if you’re exploring how you could add some investment channels to your portfolio.

On the road there, sure, it’s likely that Bitcoin and other cryptocurrencies will rise, together with the dollar and US equities.

But there can also be sharp drawdowns, all you need to do is prepare for all ranges of scenarios.

Make sure to check out our article highlighting the Ethereum Triple Halving: What Investors Should Know

On Monday, Polygon Labs introduced Polygon 2.0.

The team calls Polygon 2.0 “the value layer of the internet”.

The internet was revolutionary because it gave anyone the ability to create and exchange information across an infinitely scalable and unified environment.

Blockchains are attempting something similar – systems that allow anyone to create, own, and exchange value online.

The problem is that, in their current form, they aren’t very scalable or unified.

They get clogged when too many people use them, and liquidity and dApps are walled off from each other by their respective chains.

Imagine too many people hopping online and the internet becoming laggy, you can only access certain websites with specific browsers.

That is also the current situation of Web 3.

What is Polygon 2.0?

Polygon (MATIC) has had a remarkable journey since its launch in 2017.

The project has come a long way in development and has won several partnerships with the world’s top famous companies and brands.

In a recent tweet, Polygon Labs shared that they will soon reveal a blueprint for 2.0 in the next few weeks.

As detailed in the post, Polygon 2.0 will focus on unlimited scalability and unified liquidity.

Related Reading: Cedro Finance: New Era in DeFi Space

Polygon 2.0: Opens up a New Vision

Polygon 2.0 is the culmination of over a year of collaboration between Polygon Labs, developers, researchers, applications, node operators, validators, and the broader Polygon and Ethereum communities.

Their vision is “to build the Value Layer of the Internet”.

This requires establishing an underlying protocol that allows individuals to create, exchange, and program value, similar to how the Internet allows the creation and exchange of information.

Polygon 2.0 is a set of upgrades that help reimagine various aspects of Polygon, from tokens, and protocol architecture, to governance.

Polygon 2.0’s Multi-chain Architecture

Polygon 2.0’s announcement comes just a week after Optimism rolled out its long-awaited Bedrock upgrade.

Polygon 2.0 seems to be laying the groundwork for its own multi-chain ecosystem.

The Polygon ecosystem has a formal governance process, which continues to expand to empower the community.

It is important to reintroduce efforts around long-term thinking on Polygon governance.

The role of builders, creators, and all others in the Polygon ecosystem is more meaningful than ever.

The announcement said:

“Polygon 2.0 is a network of L2 chains powered by ZK, unified through a new cross-chain orchestration protocol.”

This is a major milestone for the Polygon ecosystem.

Related Reading: How Investors Can Tap Into Derivatives With ETFs

The Three Pillars of Polygon Governance will Continue with Polygon 2.0

The ultimate goal is to come up with specifications for an overarching governance framework, capable of pushing the Web 3 culture.

With that vision, there will be dramatic changes in the Polygon network and positivity in the MATIC price change.

Three pillars of Polygon Governance are distinguished, each of them with its own characteristics:

• Protocol Governance
• System Smart Contract Governance
• Public Goods Funding

The Concept of Value Layer in Polygon 2.0

The concept of Value Layer was introduced by Ethereum, indicating that people can create, exchange, and program value seamlessly and securely, without intermediaries.

The Value Layer democratizes access to the global economy, enabling DeFi, digital ownership, new mechanisms, and much more.

Polygon 2.0 is announced to be a blueprint for Value Layer, referring to a set of upgrades that radically reimagine almost every aspect of Polygon.

Polygon 2.0 introduces key features and improvements as the following:

• Polygon SDK
• Introduction of a new PoS chain
• A new network of Zk-powered L2 chains
• Scaling solutions
• Cross-chain bridges
• Secure Infrastructure

Important Dates of Polygon 2.0 Upgrade Plan

It is announced that only the Polygon community will have the right to accept and implement Polygon 2.0.

Polygon 2.0 Starts off with Polygon PoS

Polygon PoS was introduced on June 19, 2023, which is a huge step forward for the Polygon ecosystem.

“Many users and developers still prefer Polygon PoS because of its strong ecosystem, network effects, and very low fees, often orders of magnitude lower than Ethereum rollups.”

The strength and activity of Polygon PoS will help bootstrap the rest of Polygon 2.0.

Please look forward to when the architecture and stack are established.

Related Reading: How to use KEYRING PRO

Polygon 2.0 Proposes Polygon ZkEVM Validium Upgrade

Polygon Labs has submitted a proposal to upgrade the Polygon POS chain to a zkEVM Validium system.

According to the team, the Validium upgrade should significantly lower fees and increase scalability, because it makes transaction data available off-chain.

This is opposed to the current system which publishes transaction data to the Ethereum mainnet for validity (which therefore costs Polygon ETH gas fees).

Polygon Labs says the existing set of 100 validators will serve up the transaction data off-chain.

Related Reading: PulseChain: A Simple Explanation

Final Thoughts

Enter Polygon 2.0. Technically, it’s a network of ZK-powered L2 chains, unified by an overarching coordination protocol.

According to Polygon Labs, it’s infinitely scalable.

From a user’s perspective, it’s one big, unified blockchain.

Developers on the backend can continually scale it by adding new L2 chains.

Users on the front end never know the difference.

Given Polygon’s raging success in the crypto economy, this is a project to keep your eyes on.

If you’re interested in Polygon 2.0, please refer to this article. We’ll keep you updated as more news is released.

Traders often jump into trading options with little understanding of the strategies that are available to them.

Indeed, there are many options strategies that both limit risk and maximize return.

Strategies may sound complicated, but knowing some of them could potentially help investors enhance profits.

Have you ever heard of Derivatives Trading Strategy?

To succeed in this market, especially when BlackRock’s bitcoin ETF plans have announced,  you must know this strategy.

Before we can answer the question “Are EFTs Derivatives?, let’s take a closer look at the definition of EFTs and Derivatives.

Related Reading: Ethereum Triple Halving: What Investors Should Know

What are Derivatives?

Derivatives trading strategy is the technique traders use in buying and selling derivative contracts. In the world of financial trading, a derivative is a financial contract that derives its value from the performance of an underlying asset, which can be a commodity, stock, currency, or index.

Since its birth, derivatives have opened a world for traders who want to profit from the price movement.

Some of the more common derivatives include futures, options, forwards, swaps, etc.

Derivatives have a long history and can be used for a number of purposes, such as:

• hedge against price movement
• speculate on price movement
• get access to hard-to-trade assets and markets

Are derivatives difficult? – Yes! Any speculating endeavor about the future is difficult.

Are derivatives risky? – The answer is Yes because most traders use too much leverage.

Nevertheless, derivatives can be used in certain types of exchange-traded funds (EFTs), especially after the regulatory change from the SEC.

So, are EFTs derivatives?

Related Reading: Big Brand NFTs Are Unleashing the Future of Web 3 Art World

Are ETFs Derivatives?

What are ETFs?

ETF stands for Exchange-Traded Fund.

An ETF is a type of pooled investment security that operates much like a mutual fund.

Typically, ETFs will track a particular index, sector, commodity, or other asset.

But unlike other mutual funds, ETFs can be purchased or sold on an exchange.

Additionally, ETFs can be structured to track specific investment strategies.

Are ETFs derivatives?

What to Look for in an ETF

So, are ETFs derivatives?

You can typically search for ETFs according to some of the following criteria:

• Trading volume. The higher the volume, the easier it may be to trade that fund.
• Expenses. The lower the expense ratio, the less of your investment is given to the administration.
• Performance. This is a common metric for comparing ETFs.
• Holdings. These are the portfolios of different funds that you can find in the screener tool.
• Commissions. Even though many ETFs are commission-free, it is essential to find a dealbreaker.

How to Buy ETFs

Investing in ETFs has become fairly easy due to the diversity of platforms that are available to traders.

Follow the steps below:

• Finding an Investing Platform
• Research ETFs
• Consider a Trading Strategy

But the question is: Are ETFs Derivatives?

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Are ETFs Derivatives?

Generally, most exchange-traded funds (ETFs) are not considered to be derivatives.

However, there are exceptions.

This type of ETF is called a derivative-based ETF because the assets in its portfolio are derivative securities themselves.

Another category of derivative-based ETFs is inverse ETF, which reflects the opposite of an anchor asset or fund.

How Investors Can Tap Into Derivatives with ETFs

One of the biggest accomplishments of the ETF industry is how it democratizes access to what were once exclusively investment products.

According to a survey, many institutional investors are using ETFs as a substitute for derivatives in certain circumstances.

For example, ETFs can replace swaps to help add liquidity and flexibility.

In such a scenario as ETFs are used as a substitute for futures, ETFs may help reduce costs.

Obviously, ETFs are more efficient when it comes to seeking similar goals.

The world’s largest asset manager has successfully filed a paper with the SEC, with efforts to launch the first U.S bitcoin exchange right amid the crackdown from regulators.

Will they succeed? No one knows. But at least they’ve got global reach, along with their high prestige among institutions around the world.

If you are wondering How to use KEYRING PRO

Bottom Lines

High-net-worth individuals have been seeking information on everything, not only about cryptocurrencies but also indirect crypto investments through ETFs.

Are ETFs derivatives? Despite ETFs have continually become an increasingly popular vehicle, they are technically and inherently NOT derivatives.

However, a select number of ETFs use derivatives to help reach their objectives, such as leveraged ETFs, inverse ETFs, and commodity ETFs.

In conclusion, it is important to understand the basis of ETFs and how derivatives work. As with any other type of investment, do your own research, and only invest when you fully understand the know the risks.

He also believes that Ethereum may stand to benefit even more from the Triple Halving than Bitcoin does through its 4-year cycles.

However, no one really has any idea how it will play out amid the current bear market – which has already had a disproportionate impact on crypto.

While the cryptocurrency community is waiting for an event that has long been promised and delayed, another important development has taken place in the Ethereum network: The Merge.

One key issue related to the Merge is Ethereum Triple Halving – which is likely to have a big impact on the crypto’s future.

So what exactly is Ethereum Triple Halving? How does it work?

Let’s learn about it in our article.

What is Ethereum Triple Halving?

Ethereum Triple Halving is a unique process that involves a significant reduction in the block reward from 3 ETH to 1 ETH.

You may have heard about Bitcoin Halving if you’ve been around crypto for a while.

Similar to the way Bitcoin Halving occurs every four years to reduce the network’s inflation rate, Ethereum Triple Halving places deflationary pressure on Ethereum.

In this case, the term is used to describe three factors:

• Reduced ETH issuance under Proof-of-Stake consensus
• ETH burning via the EIP-1559 upgrade
• ETH staking lowers the amount of ETH that is effectively in circulation

Related Reading: Cedro Finance: New Era in DeFi Space

How Does Ethereum Triple Halving Work?

The process of Ethereum Triple Halving consists of three main procedures:

The migration to Proof-of-Stake Has Led to a Reduced Issuance

As far as we’ve known, the migration of Ethereum from Proof-of-Work to Proof-of-Stake has led to a significant impact on Ethereum’s supply.

Specifically, Ethereum has to issue much fewer ETH to reward stakers than the amount it has to issue to reward miners.

In accordance with PoW requiring large computation power, miners are incentivized to do this by being provided high block rewards.

Meanwhile, with the move to PoS, the network no longer needs miners but validators, and staking requires much less energy and is cheaper to start with.

Therefore, the network’s ETH annual and daily issuance will drop drastically.

According to a tweet from blockchain engineer Montana Wong,

“Annual issuance of ETH will drop from 4.3% pre-merge to an estimated 0.4% post-merge.”

Moreover, it is expected to decrease the daily sell pressure on ETH by 10x.

EIP-1559 and Transaction Fees Burning

The updated EIP-1559 was implemented during the London Hark Fork in 2021. That, as a result, proposed an introduction of a potential deflation mechanism.

*EIP-1559 stands for Ethereum Improvement Proposal –  an upgrade that happened on August 5, 2021, to change how Ethereum calculates and processes network transaction fees. 

This mechanism involves burning a portion of transaction fees under certain conditions.

That will generally help a lot more in reducing the inflation rate.

Staked Ethereum Withdrawals

ETH staking is the third factor that involves in the Ethereum Triple Halving.

The Proof-of-Stake mechanism relies on the individuals staking their ETH on validators.

Even before the Merge, individuals have had chances to participate in staking and get rewards.

However, this procedure has recently turned out a bit less relevant due to many times of upgrades in between.

Keep in mind that the ability to withdraw ETH hasn’t actually translated into the withdrawals of staked ETH.

Furthermore, most ETH stakers are happy to stake their assets and passively earn yield on their holdings.

The more upgrades the Ethereum’s staking system have, the larger the number of investors are willing to stake their coins.

Despite the ability to stake ETH as an incentive against selling, ETH staking is positively contributing to the network’s long-term growth.

Related Reading: Exploring the Potential: Use Cases of ERC-6551 Token-Bound Accounts

When is the Ethereum Triple Halving Happening?

Unlike Bitcoin Halving which was happening every four years, Ethereum Triple Halving doesn’t have a specific date.

But we can say that the process has already happened so long as the Ethereum protocol is changed in a relevant way.

Related Reading: Big Brand NFTs Are Unleashing the Future of Web 3 Art World 

Bottom Lines

In conclusion, the Ethereum Triple Halving will see a significant cut-down in supply, imposing ETH even scarcer on the market.

This is relatively reminiscent of the implementation of the MEV-Burn Proposal, in which scarcity is expected to drive up the price.

Of course, Ethereum Triple Halving makes Ethereum a more attractive asset to hold over the long term and is one of the factors to determine whether this cryptocurrency will ultimately gain widespread adoption in the future.

Whatever approach you choose to take towards this looming moment in crypto, remember that it’s essential to store your crypto securely and seamlessly in a wallet like KEYRING PRO.

Cedro Finance is a cross-chain decentralized liquidity protocol where users can lend and borrow the listed assets across multiple chains with affordable transaction fees.

Lenders are able to deposit their assets to contribute to the liquidity of the platform. Simultaneously, borrowers are able to borrow the liquidity in an overcollateralized manner.

Cedro’s vision is to provide a seamless user experience for this cross-chain process without compromising on security.

For the same action that took ~50 clicks,  a user can do it with ~5 clicks.

Cedro Finance is starting out as an Omnichain lending and borrowing protocol but eventually aims to become an Omnichain financial hub, and currently has new products in development.

Cedro Finance has been live on testnet since 2022 and has since processed over 300,000 transactions

What Makes Cedro Finance Different?

Right now, the cross-chain lending and borrowing process seem to be quite tedious, dangerous, and expensive.

Cedro Finance founder Rachin Kalakheti once said:

“Operating under the UX of existing cross-chain bridges, a user needs to use multiple dApps and over 50 clicks just to deposit in a cross-chain manner.”

In addition, with Cedro Finance, liquidity is fragmented at chain, application, and asset levels.

There are numerous reasons to use Cedro Finance:

• Higher capital efficiency, which means better rates on assets for lenders and borrowers.
• Wider financial opportunity access. Users can open your position on multiple chains with ease.
• First-class user experience. Users can open positions across chains in just 5 clicks.
• Securely and easily scalable. Cedro Finance has top-notch architecture.

Furthermore, Cedro Finance introduces to users new features that have never been on the market:

• Isolated Market Pools: this allows the platform to support more risky assets, similar to how Solend is doing.
• Computation Offloading: this allows the platform to reduce computations on smart contracts, resulting in cheaper transaction fees.

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What is Cedro Unified Liquidity Token (CULT)?

Currently, many of the multi-chain assets (stablecoins) are being treated as different assets, hence the liquidity fragmentation is at asset level.

For example, USDC is live on multiple chains such as Ethereum, Solana, Polygon, etc. Yet, they are treated as different assets.

Cedro Finance can virtually merge the liquidity of these assets across chains. So, the origin chain of the stablecoins will be trivial.

Cedro Unified Liquidity Token (CULT) is the exclusive feature that tackles the problem of fractured liquidity found on protocols like Uniswap.

Instead of spreading one token across multiple networks, CULT lets users deposit multi-chain assets (ex. USDT, UNI, etc.) from different chains and adds them to a singular unified liquidity pool.

As a result, capital efficiency times 100, or even infinity!

About CED Token

CED is the native utility token of Cedro Finance.

It will be deployed on all chains supported by the protocol.

This token will be allocated to those who provide value to the protocol itself, including lenders, borrowers, ad stakers.

Cedro Finance has announced the release of its CED token and is expected to distribute rewards to all users who’ve participated in the Cedro Finance Testnet on BSC, Fantom, Arbitrum, Avalanche, and Ethereum.

Total supply is 500M, with an allocation as distributed below:

Cedro Finance makes revenue from the following fees:

1. Cedro’s Treasury: 65%
2. CED and veCED holders: 25%
3. veCED holders: 10%

CED is used to incentivize the Liquidity Providers (Lenders) for their contribution to the protocol, with two dependent factors including the liquidity they provide in the pool and the time they provide the liquidity.

CED token is also used during the staking procedure. Through time, the stakers will receive veCED by the amount calculated below:

veCED = CED * time

*Note: one unit of time equals 6 months

Specifically, if a user stake 100 CED for 6 months, they’ll receive 100 veCED. If they stake 100 CED for 12 months, they receive 200 veCED.

The holders of veCED will have the benefits of governance voting and boosted earnings.

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About Cedro Finance’s Ecosystem

The major goal of Cedro Finance is to act as a cross-chain liquidity layer over time.

Other than that, Cedro Finance can be an infrastructure to build many dApps, such as

• overcollateralized decentralized omnichain stablecoins,
• peer-to-peer cross-chain lending and borrowing platforms,
• cross-chain exchanges, omnichain yield aggregators,
• cross-chain trading platforms,
• credit line for fiat platforms.

Any many more!

Cedro Finance’s Architecture

Cedro Finance is comprised of 3 major components: brand, messenger, and root.

Cedro Finance Testnet Token Airdrop

To get started all you have to do is click on the “Get Test Token” tab located at the top of the page.

Once you have your test tokens choose “Add More” from the collateral list at the bottom of the page and deposit your tokens into Cedro.

You can jump between multiple networks and request testnet tokens for each one.

How to Deposit

1. Go to https://app.cedro.finance/
2. Connect your Wallet, using WalletConnect to add your wallet to KEYRING PRO 

3. In the navigation bar, click on the ‘Get Test Token‘ button to receive Cedro test tokens (assets to deposit) and Native test tokens (for gas). 

4. Go to the Market tab from the navigation bar, where you can choose the network and the asset you want to deposit. Click on the ‘Detail‘ button to learn more about the asset.

5. On the asset detail page, click on the ‘Supply‘ button. You will be prompted to change the network to the network of the asset if you aren’t already connected.

6. Enter the amount you want to supply and click on ‘Supply‘.

The information will be sent to the Root chain. After that, your transaction will be successful. The status of a transaction can be tracked in the Transaction History tab from Dashboard. 

How to Borrow

1. Inside the Asset Detail page, click on the ‘Borrow‘ button.
2. You need to switch the chain to the Root (Mumbai testnet) chain because Borrow, Withdraw, and Liquidate actions are performed in the Root chain.

Pre-2017

This is the experimental era when early NFT-like objects weren’t called NFTs yet.

Before Ethereum, we had Colored Coins, Counterparty, and a platform called Ascribe.

All on Bitcoin. And what’s regarded as the first NFT is a piece called Quantum, which was created on Namecoin in 2014.

2017 to Early 2021

In 2017, NFTs gained a little recognition but were still unheard of outside the crypto circle.

By this time, there was development happening on Ethereum. Both CryptoPunks and CryptoKitties launched in 2017, laying some important foundations.

In 2020, Art Blocks was founded. As the crypto bull market gained momentum, the JPEG stage was set.

2021 to 2022

This time witnessed the NFT explosion, with the hype and prices going through the roof.

CryptoPunks became art objects, Bored Apes minted, and huge numbers of new projects launched and quickly grabbed the spotlight in the crypto-sphere.

But even amid growing mainstream attention, NFT projects still felt indie. Creators were mostly anonymous, and corporate players were mainly hanging back.

2023 and ongoing

Despite the NFT market crashing, we appear to be entering a new era of big brand NFTs while executing Web 3 strategies.

Big brands call their NFTs digital collectibles. Especially, they’re easy onboarding through custodial services and credit card payments, along with links between digital assets and physical products.

The Recent Big Brand NFTs News

ANA NFT Marketplace

All Nippon Airways (ANA) is the biggest airline in Japan and has now launched its own NFT marketplace called ANA GranWhale through ANA NEO – the metaverse-focused division of this big brand.

This might not look like a usual combination, since airlines and NFTs aren’t usually mentioned together.

But it makes sense because, after all, transports attract enthusiasts – who are often into collectibles. Japan is the home of otaku culture. And NFTs are a new kind of collectibles.

Looking back in history, ANA had once issued NFT collections from the aviation photographer Luke Ozawa – along with aviation-themed PFPs.

After all, this is an interesting move when it comes to big brand NFTs, and it is more interesting to see how it plays out.

Mercedes-Benz and Fingerprints DAO

Like several big brand NFTs’ initial launches, Mercedes-Benz has now established a Web 3 division – called Mercedes-Benz NXT.

It just collaborated with Fingerprints DAO and the artist Harm van den Dorpel for an NFT drop called Maschine.

Fingerprints DAO is one of the top NFT DAOs, with a history of collaborations with artists and a bunch of substantial art collections.

Harm van den Dorpel is a celebrated creator who is well-known for his history of digital and blockchain experiments.

Mercedes-Benz, of course, in this case, is taking an artistic angle when joining the list of big brand NFTs.

Nike and EA Sports

Nike Virtual Studios and EA Sports have announced a groundbreaking partnership that will revolutionize the virtual sports experience, marking another hit in the big brand NFTs.

Ron Faris, GM of Nike Virtual Studios, has shared:

“Nike and EA Sports share a commitment to innovation, creativity, and excellence…”

Both Nike and EA Sports are big brands in their respective fields. So, their collaboration made big news, especially when blockchain gaming is a potential area.

Last year, Nike launched the .SWOOSH platform, which focused on NFTs and metaverse-style products.

Now, .SWOOSH will link up with EA Sports, allowing users to bring .SWOOSH assets into EA Sports games.

Louis Vuitton Treasure Trunks

Luxury fashion house Louis Vuitton is going to join the big brand NFTs journey with a collection that blends the physical and the digital.

The collection is part of a brand’s Web 3 project called Via. There are only a few hundred items, and potential buyers need to sign up for the waiting list.

Curiously, the item will be a Soul-Bound Token, which means holders cannot trade the NFT.

Purchasing the NFT will give the holders access to future product releases and experiences, as well as the membership of the brand community campaign.

Doodles and Red Bull

The famous group of artists from Doodles – one of the projects vying to establish themselves as Web 3 brands – have recently collaborated with Red Bull for a drop called Red Bull Doodle Art.

The collection actually consists of artworks created by 61 doodle artists who won a contest to be selected and were then mentored by the Burnt Toast.

On top of that, Doodles will be releasing physical goods as well as in-person immersive experiences. Moreover, Doodles NFT holders will receive special perks.

Reddit Collectible Avatars

Last year’s surge in NFT interest among Reddit users brought people to surprise.

This year, an NFT collection of Reddit – which is called Collectible Avatars – has been released, showing an incredible increase in the number of holders.

Big Brand NFTs are Here

The explosion of big brand NFTs shows that the market is getting ready for an incredible leap into future utility and gaming with NFTs.

Indeed, prices may be down on PFPs, metaverse land, gaming items, and maybe well-known collections, but big brand NFTs are creating some major changes in the landscape.

Looking at the news right now, recent NFT developments are related to huge, global companies. That is very interesting because it is very different from how things were long ago.

If you would like to know how the space has evolved and what is coming up next, please refer to this article.

Because of mempool-related arbitrage, Ethereum developers have recently proposed a rigorous solution for the battles that have been broken down from time to time.

And what is the solution they could use? They will burn the ETH that MEV traders currently pocket!

This proposal may have both pros and cons.

While the primary goal is to solve part of Ethereum’s stability, the not unwelcome byproduct is that Ethereum will become more scarce, or even deflationary.

So what is MEV?

Let’s find out more in the following sections of this article.

What is MEV?

MEV stands for Maximal Extractable Value, meaning the additional profit validators can scoop up while adding blocks to the blockchain.

This definition arises as a function of the overlapping preferences of market participants who transact on a blockchain.

MEV originally meant Miner Extractable Value, the term has since evolved to mean Maximal Extractable Value.

In order words, MEV is a value captured on a chain in a game that is played between miners, researchers, block builders, wallets, and users.

Historically, mining pools have sat in the privileged position of being able to select which transacts are or are not included in a block. 

MEV provides an opportunity for any on-chain actors to extract value, but those opportunities are not distributed uniformly within blocks. They can be unpredictable and highly lucrative.

Its supply chain process will be explained in the picture below before we get to gain a better sense of the concepts of MEV.

• The user who has the intent to transact logs into their web3 mobile or browser wallet which is used to connect to the decentralized application’s front end
• Wallet signs the user’s transaction, interacts with the Web3 API, then sends the user transaction to a local node. Some wallets rely on a Node service provider like Infura
• The Local Node receives the signed transaction and validates its correctness before propagating it to Peer Nodes
• Full Nodes gossip the pending tx and store it in their general memory or “mempool”
• Mining pools pick up transactions from the Memory Pool and order those by a greedy algorithm that sequences tx based on fees. The limit per block is 30M gas. The target block size is 15M
• The mining pools create a block template and forward the headers to miners who compete to solve the difficult puzzle, eventually giving the winning block weight in the fork choice rule
• Once a valid block is mined the miner will inform the network and the block will be broadcasted to and propagated by the full nodes who check that all of the block’s transactions are valid; full nodes can reject invalid blocks that do not follow consensus rules.

Types of MEV

There are four general types of MEV:

• Arbitrage
• Liquidations
• Sandwich (front/back run)
• Long-tail

Arbitrage

Arbitrage plays an important role on-chain as Decentralized Exchanges (DEX) rely on arbitragers to keep the prices of their Automated Market Makers (AMM) in line with competing AMMs and off-chain oracle prices. 

A common arbitrage opportunity occurs when AMMs contain the same toke pairs, e.g., ETH-DAI, across different DEXs are imbalanced.

Another example is off-chain to on-chain, e.g., centralized exchange to a decentralized exchange (DEX).

Liquidations

Liquidations occur when a debt position on-chain becomes undercollateralized.

Typically, users who seek liquidity for their on-chain assets can post them as collateral in order to take out a loan.

Because liquidations can be quite profitable, there is much competition among searchers to capture this form of MEV.

Liquidations can be extremely lucrative and represent some of the best MEV opportunities.

Sandwiches

Sandwiches are probably the most well-known form of MEV as they are user-facing, namely the most toxic one.

At its core, a sandwich attack is a form of front-running that primarily targets DeFi protocols.

Specifically, in a sandwich attack, a trader looks for a pending transaction on a chain of their choice, then front-run and back-run simultaneously, with the original pending transaction sandwiched in between.

A sandwich occurs when a user sends a swap transaction to the general memory pool with a non-0 slippage.

The purpose of this whole thing is to manipulate asset prices.

Participants of Ethereum’s public memory pool are able to maximize the money they make from block creation by reordering transactions within blocks and even inserting new ones.

The majority of this type of attack will be performed through automated market makers (AMMs), such as Uniswap, Pancakeswap, Sushiswap, etc.

Even though they are not as popular an attack as rug pull, sandwich attacks can cause pretty much problems in DeFi, to the extent that Ethereum’s founder once warned us about them back in 2018.

It is crucial to protect users from sandwich attacks by developing countermeasures.

For example, 1inch introduced a new order type called “flashbot transactions”, which is not visible in the memory pool. At the same time, they will directly connect with trustworthy miners to make transactions visible after they are mined.

Long-tail

Long-tail MEV activities denote uncommon or infrequent types of MEV not mentioned above.

It can be the most profitable.

It is captured by interacting with lesser-known protocols.

MEV-Boost

MEV-Boost is an implementation of Proposer Builder Separation (PBS) provided by Flashbots developed in collaboration with Ethereum developers and researchers.

Validators are going to maximize their staking reward by using this method and selling block space to an open market of builders.

How Can You Burn MEV?

First, quantifying the amount of MEV. The simplest way to do this is using a Proposer/Builder Separation (PBS).

In PBS, builders compete against each other and offer bribes to proposers for their blocks to be included. Then proposers just simply have to pick the top bid.

Nowadays, such auctions happen out of the protocols via MEV-Boost.

Want to burn MEV directly in the protocol? The first, and probably the hardest step, is to enshrine PBS.

This way has multiple benefits, but the most relevant one would be the protocol itself will become aware of MEV bids.

A less direct alternative way to burn MEV would be to combine two distinct proposals. Specifically, smoothing it across validators, then adjusting the yield curve. That way MEV would go to validators, but they would be paying for their spot.

Does MEV-Burn Solve Toxic MEV?

The answer is no.

MEV-Burn will not eliminate toxic MEV.

What are the Benefits of MEV Burn?

Burning MEV solves a few problems, including:

• Smoothing the staking yield
• More stable validator set
• Reducing incentive to reorg the chain
• Enhancing the economic qualities of ETH

Does ETH Get Even Scarcer?

The prediction is impossible, but you can look at the MEV-Burn Proposal dashboard, particularly the amount of MEV going to proposers.

As of early May 2023, it is estimated that burning MEV would have resulted in supply declining roughly 3 times faster.

A Problem with MEV

MEV is a small industry. Currently, hundreds of thousands of dollars per day are squeezed from blockchain transactions by MEV bots.

As you can see, the average MEV payment is around 0.05 ETH per block.

But it can spike dramatically to an insane 1 ETH per block, happening for a couple of hours.

Within those couple of hours, there have been blocks in that a lucky validator squeezes more than 100 ETH from a single block.

These spikes usually occur when a new token or NFT of a popular public project launches. At such times of high traffic and congestion, validators can benefit from their “inside knowledge” and front-run others’ transactions.

MEV-Boost still leaves room for those undesirable spikes. Therefore, MEV-Burn will have to get rid of those.

So When is MEV-Burn?

It will likely take four years or so to be implemented.

Because the Proposer-Builder Separation (PBS) needs to be implemented first. This is scheduled to go live in the splurge phase of the Ethereum roadmap.

In the meantime, MEV bots can enjoy those sweet profits.

Summary

Ultimately, MEV will exist in some form. This is assumed as the biggest upgrade of Ethereum since EIP-1559.

While the market is still evolving in the infrastructure and the application of layers, acknowledging MEV now is critical.

Composable blockchains that prioritize mitigating the negative effects of MEV will reduce the existential risk for their own chains. And within public blockchains that are censorship-resistant, mass adoption can be much safer.

This article explained what MEV is, how the blockchain space and market take advantage of MEV-Burn, and how we can avoid some possible negative effects.