This week in The Context: Solana takes a nap, 😴 ENS go-go-goes toward GoDaddy, 👨 and scammers are creating more tools to fake out crypto exchanges.
[Solana Gets Some Downtime 🔻]
The Solana network, which competes with Ethereum and other smart contract-enabled blockchains on the basis of high throughput and low costs, experienced a 5-hour outage on Tuesday, nearly a year after its last outage. 😵
What Journalists Said 🧑💻:
Basically, the blockchain stopped producing blocks, wrote Osato Avan-Nomayo (DL News). Devs quickly released a software patch for network validators to download before restarting the network. Solana says it will release a report on the cause. 📝
Don’t expect these outages to go away, said Andrew Hayward (Decrypt). Solana has a “development ethos that prioritizes network safety and security over perfect uptime.” The blockchain’s devs say the resultant criticism doesn’t faze them.
The appearance of another outage didn’t faze the market much either, with traders taking a “blasé attitude towards the downtime,” noted Jack Kubinec (Blockworks). The price of SOL actually went up on Tuesday, continuing its months-long tear. 📈
Why It Matters ⁉️:
Solana has had a great six months, with its token price quadrupling and the Jupiter airdrop further reminding people they have choices beyond Ethereum when it comes to smart contract blockchains. But the outage highlights Solana's ongoing technical challenges as well as its approach to addressing them. Now, users get to decide what tradeoffs they wish to make.
[Ready, Set, GoDaddy! 🏁]
The Ethereum Name Service (ENS) reached a partnership deal with GoDaddy, the largest domain name registrar by market share. 👨 [Disclosure: ENS is a YAP Global client.]
What People Said 🧑💻:
How does this work? “ENS .eth domains allow users to register domain names on Web3, simplifying complex wallet addresses into human-readable names,” wrote Arijit Sarkar (Cointelegraph). “With GoDaddy onboard, Web3 users can now link their .eth domains with traditional URLs at no extra cost.”
What a turnaround. Less than two years ago, ENS successfully sued GoDaddy over selling an Ethereum-related domain name, said Samuel Haig (The Defiant). Now, it’s partnering with it.
Keep an eye on these types of partnerships. 👀 “Web3 adoption by mainstream companies slowed down during the bear market, but the deal between ENS and GoDaddy, the largest internet domain registry, might signal a renewed interest in connecting blockchain with traditional technologies,” speculated Margaux Nijkerk (CoinDesk).
Why It Matters ⁉️:
This integration is designed to improve the crypto user experience, which is often confusing even for those with technical knowhow, but it’s also a test case for future legacy internet firms looking to dip their toes into the Web3 waters. 🌊
[OnlyFake News 🗞️]
404 Media reported it used a website called OnlyFake to generate a photo of an ID that bypassed the know-your-customer process of crypto exchange OKX. 🪪
What People Said🧑💻:
“Could this make it harder for exchanges, banks, or other institutions to stop money laundering and fraud?” asked Joseph Cox (404 Media). While some fraudsters pay people to provide fake identification or even make their own, this tool generates images that can fool some identity verification processes—for just $15.
Such tools have been worrying the crypto industry for some time, said Jesse Coghlan (Cointelegraph). Binance last year reported an increase in the number of people trying to get past KYC using deepfake technology. 👩💻
You can use this technology, but you probably shouldn’t, warned Jose Antonio Lanz (Decrypt). Sites like OnlyFake, which closed down after 404’s reporting, are “openly criminal” and “could be keeping a list of clients.” Indeed, OnlyFake’s 600+ Telegram members have phone numbers linked to their accounts. “Big Brother may already be watching.”
PR Perspective 🔎 :
U.S. lawmakers recently grilled social media execs about the steps they were taking to protect children on their sites. Crypto exchanges, which have already been targeted by legislators and regulators over KYC measures, must proactively find ways to prevent people from faking their way onto their services—or risk further pressure from D.C.
[Tweet Of The Week]
Credit: @MarshamallowMRSH
[DeFi Definitions]
A segment exploring one particular aspect of DeFi. View previous entries here.
This week: ‘’Impermanent Loss” by Sara Peoples.
An impermanent loss happens when the value of assets you stake in a liquidity protocol changes, resulting in you generating less profit from staking than if you had just held them. It’s kind of like locking your money up in a bond that pays out 3% in a year, then watching your bank roll out 5% yields on checking accounts.
This "loss" is "impermanent" because it can decrease as the market stabilizes. However, there is no guarantee that the ratio of asset values will return to their previous levels.
Liquidity providers may realize these "losses" when they withdraw their assets. They can use numerous hedging strategies to try to mitigate the risk of this happening, and some platforms provide protection against impermanent loss.
The usual disclaimer: This newsletter collates the main themes and headlines of the week in DeFi/crypto/metaverse/Web3/NFT land and tries to provide unbiased context. It's aimed at anyone who wants to keep an eye on the space. It's put together by a team at YAP and doesn't contain any promotion of our clients (if one is mentioned, we'll flag that).
The team: Founder Samantha Yap and consulting editor Jeff Benson, Sam O'Donohoe, Ewan Brewster, Andrew Wickerson, Tiffany Mac Sherry, Liam Quinn, Becky Corbel and Delon Chan. Your feedback is, as always, welcome. Ping us at thecontext@yapglobal.com. Old newsletters can be found here.
This newsletter is prepared by YAP Global, an international P.R. Consultancy focusing on helping cryptocurrency, Decentralised Finance (DeFi) and brands through impactful storytelling. Find out more about us here.