Tag: Update

In preparation for the release of Episode I of Monuverse’s NFT collection, let’s explore 6 ways of using them

Let’s recap how the collaboration between Monuverse and Young Platform works, explained in full in this article.

By the 9th of November at 5 p.m. (UTC), Club members who want to attempt to be whitelisted must register with their wallet address on the whitelist page (check your email for link and password).

Those who are on the whitelist will be able to purchase and mint a maximum of 3 NFTs at the advantageous price of 0.07 ETH each on 11 November from 5 pm to 7 pm (UTC).

Once purchased, you can display your NFTs on OpenSea and similar applications.

Remember you will be able to see the real image or video you have purchased  only after the Reveal phase is completed.

Once you have obtained the NFT and discovered its contents, there are 6 benefits and uses to which you have access.

1. Protection and promotion of cultural heritage

You are officially a Web3 philanthropist: by purchasing an NFT, you are helping to fund the preservation of the Peace Arch. And, by purchasing future Episodes, you will do the same for other monuments.

For Episode I, the Milanese monument protection organisation will receive 12% of the royalties from your purchase in the primary market (minting), while in the secondary market it will receive 1%.

In metaverse galleries, on compatible social networks and on your screens at home, you will be able to display and promote your work freely. The blockchain will irrefutably tell your story about how you helped preserve an artistic work.

2. Web3 Community

Crypto communities are typically found on messaging and social apps, e.g. Discord, Reddit, Telegram, while projects and teams communicate mainly on twitter (for now). Monuverse also has a Discord server for its patron community and a Twitter profile for official communications.

As is often the case, the possibility of participating in events and conversations with the team is much higher for owners of rare NFTs.

3. PFP and Avatar

There are different types of NFTs. Among them, PFPs are very popular on social media. They are simply NFTs used as profile pictures, so they are usually static images representing the face of a character. The NFTs of the Bored Ape Yacht Club for example are widely used as profile pictures.

An Avatar, on the other hand, is a 3D version of a character. It is usually used in video games or simply in a metaverse and is often customisable through accessories and skins.

Monuverse gives its community a PFP and an Avatar in the metaverse it is building, and you can use them not only on Monuverse, but on most Web3 applications.

Each Episode corresponds to PFPs and Avatars that reflect the historical period or culture of the chosen monument. So, for example, for Episode I, centred on the Arch of Peace, characters from the Napoleonic era will be distributed.

4. Whitelist

Owning a Monuverse NFT grants you priority access to the whitelist of future episodes. This means that you can mine your NFT at a cheap price compared to the public sale price. The rarer your NFT is, the more likely it will be to be whitelisted.

5. Voting rights

You can vote with the rest of the community to choose the next monuments that Monuverse will commit to replicate and protect. From the roadmap, the team also plans to create a more extensive voting system for the community and a DAO to reward active user participation.

6. Buying and selling

Of course you can resell your Monuverse NFTs either before the Reveal phase or afterwards, on the secondary market of OpenSea and other aggregators such as LooksRare, Rarible, x2y2. You can sell as many as you want; giving up ownership of all NFTs. However, this also means giving up the community and its benefits.

Moreover, selling is only an option if you think that the NFT you own may be in such demand on the market that it will bring you a significant profit for you in the chosen period. 

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The story of the million-dollar sale of the Crypto.com internet domain tells of the importance of having a recognisable name on the web!

To those of us who use the Internet on a daily basis, the decisive role of Internet domains may escape your attention. Between the late 1990s and the beginning of the new millennium, domains were the subject of real speculation. In even more recent times, the sale of certain addresses has reached astronomical figures. Such is the case of the Crypto.com domain, registered in the 1990s and resold for millions of dollars in 2018. The story of the million-dollar sale of the Internet domain Crypto.com provides much food for thought on the importance of identity on the Web!

‘Crypto.com’ is not the real name of the exchange

You may not know that ‘Crypto.com’ is not the original name of the well-known centralised cryptocurrency exchange. The company was founded in Hong Kong in 2016 by Bobby Bao, Gary Or, Kris Marszalek and Rafael Melo. It was created under the name ‘Monaco’. Only a few years later, in 2018, the exchange was renamed ‘Crypto.com’, thanks to the purchase of the rights to the internet domain of the same name. The company spent a huge amount of money to obtain this domain, fighting with the previous owner who for many years refused any offer. How much was Crypto.com bought for? The negotiation has always remained secret, but the estimated figure is between 5 and 10 million dollars.

Who was the owner of the Internet domain Crypto.com?

The first owner of the Crypto.com domain was Matt Blaze, a professor and cryptography researcher at the University of Pennsylvania, who registered it in 1993 at the beginning of his academic career. Blaze had deposited the domain for free at the time, because it was not until 1995 that the organisation that managed the Domain Name System (DNS) decided to monetise domain registration. Blaze used the domain Crypto.com as the address of his personal cryptography-themed blog in which he shared resources and tried to dispel the myth that cryptography is a business for criminals. As early as 2000, a company called ‘Crypto.Com, Inc’, which dealt in encrypted communication services, made the first proposal to buy the domain owned by Blaze. But it was only with the cryptocurrency boom, around 2016, that Blaze was inundated with offers for Crypto.com. However, the professor never intended to give up his valuable domain, stating repeatedly and publicly that Crypto.com was not for sale.

Crypto.com, a valuable internet domain (for many reasons)

Throughout its history, Crypto.com has proved to be a valuable domain because it is unique and capable of communicating a precise identity, that of the cryptocurrency world. Anyone who uses it will immediately be associated with the sector it represents.

The Crypto.com domain was so coveted that a potential buyer came to Blaze’s office at the university, begging the professor to accept his offer.

But why did Blaze so strongly oppose the sale of the Crypto.com domain? Again, the question of identity returns. In a nutshell Blaze argued that the domain should refer to a cryptography project and not a cryptocurrency project, since the original meaning of ‘crypto’ relates to the former semantic field. Blaze criticised the use of the term ‘crypto’ to refer to cryptocurrencies; ‘crypto’ originated as an abbreviation of ‘cryptography’ and not ‘cryptocurrency’. The professor did not want to fuel the association of cryptography with cryptocurrencies, which he personally has always viewed with suspicion and little connection to cryptography.

In support of this thesis, Lorenzo Franceschi-Bicchierai, a journalist with expertise in hacking and cybersecurity, also spoke out in 2017. Franceschi-Bicchierai showed how on Google News or according to vocabulary, ‘crypto’ referred to cryptography. “Think, for example, of the term ‘crypto wars’ (‘Crypto Wars’), which refers to government (originally the US) efforts to undermine and slow down the adoption of unbreakable communication systems”. The journalist’s contribution also includes a statement by Emin Gün Sirer (who had not yet founded Avalanche) in which he explained that cryptography in cryptocurrencies is an ‘ancillary’ element and that the real innovation is the use of blockchains as consensus mechanisms and distributed systems.

This was the case in 2017, but now the situation is definitely reversed. Language has evolved and searching for ‘crypto’ on Google means coming across content and information exclusively related to the world of Bitcoin&Co. Today in dictionaries, the first meaning is ‘abbreviation for cryptocurrency’, only the second is ‘relating to crypto’.

The Million Dollar Sale of the Crypto.com Domain

Suddenly, however, in 2018 Blaze writes on his blog: ‘over the past few years I have received a growing series of offers, many of them obviously not serious, but some of them frankly attention-grabbing, for the Crypto.com domain. I ignored most of them, but it became increasingly clear that keeping the domain made less and less sense for me. Earlier this year, I entered into confidential discussions with some serious potential buyers. Last month, I reached an agreement to sell the domain.

The cryptographer Blaze had actually sold the Crypto.com domain to cryptocurrency exchange Monaco for a few million dollars. After the purchase, the former company ‘Monaco’ implemented the rebranding operation to become ‘Crypto.com’ as we know it now. The case of Crypto.com is just one of many examples of how important a domain name can be in the identity of a brand. Being recognisable on the Internet, with the most appropriate name, becomes a (million-dollar) business matter. The Hong Kong exchange’s operation has ensured that its brand is directly identified with its product, crypto.

Many other crypto-themed domains have had a similar history to Crypto.com and have passed into the hands of companies in the industry. Among these Internet domains are Tokens.com sold for $500,000, Cryptoworld.com for $195,000, Eth.com for $2 million and Bitcoinwallet.com for $250,000.

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Which latest projects won Polkadot’s parachain auction? There are four of them and they will be active in the Relay Chain from October 2022. Find out what they are all about!

Almost a year after the launch of the first parachain auctions on Polkadot, the Dotsama (Polkadot + Kusama) ecosystem is experiencing the peak of its technological development. According to GitHub data, more than 500 programmers per day were working on Polkadot’s infrastructure in September 2022. Polkadot’s developers, together with those of Ethereum and Cosmos, are the most active in the industry. At the end of September, the Polkadot team released an updated roadmap presenting upcoming features, including the launch of paratherads, i.e. blockchains that pay for the use of Polkadot’s Relay Chain without participating in auctions. In total, 30 auctions have taken place already and there are 27 active parachains on Polkadot (41 on Kusama). Let’s look at the four projects that won the auctions for Polkadot parachains between the end of August and the beginning of October 2022.

What are parachain auctions on Polkadot?

Parachain auctions on Polkadot are ‘sales’ of slots on the Relay Chain. Polkadot is a multichain ecosystem that offers its infrastructure to build blockchains with specific use cases. Projects that win one of the slots can develop their own blockchain idea using the core network for the consensus mechanism and security, becoming parachains for all intents and purposes. These are ‘candlestick’ auctions, i.e. auctions that end at a random time during a period of about a week. At the end of the auction, the project that has collected the most DOT, the Polkadot coin, wins. To participate in the auctions, various projects bid by locking in DOT (bonding) collected internally within the project or through crowdloans among the community. The slots on Polkadot last for a maximum of 2 years (96 weeks). After the end of the period, the DOTs in bonding are released and are made available again to the project that had initially blocked them. 

1. Aventus Network

Aventus Network won the 26th auction for Polkadot parachains by raising 200,000 DOT (approximately $1.2 million). It is a blockchain founded in 2016 with the aim of making decentralised services on Polkadot and Ethereum accessible to companies that want to include them in their customer offerings. Aventus Network thus proposes the development of NFTs, video games, loyalty programmes, event tickets, and supply chain management. One of the projects already using Aventus Network to manage its tokenomics and blockchain transactions is FruitLabs, the social network for gamers. On FruitLabs, gamers get PIP token rewards when they share their gameplay.

2. Watr

The winner of Polkadot’s 27th parachain auction was Watr, a blockchain that wants to introduce a method to market a ‘new class of ethical commodities’. By definition a ‘commodity’ is a raw material e.g. oil, coal, sugar. Watr was created to make commodity trading ethical and tracked via blockchain. The services this new parachain wants to offer are the tokenisation of non-digital assets (real world) and management of production chains. Watr’s project is still in its infancy: the whitepaper is in the works these days as well as the tokenomics of their WATR token. The mainnet is scheduled to launch in January 2023. To win its slot, Watr raised 125,224 DOT ($778,893) at auction.

3. OAK Network

OAK Network, with OAK standing for On-chain Autonomous Kernel, is the winning parachain of the 28th auction with 149,998 DOT in bonding ($932,990). OAK Network’s target sector is DeFi. Specifically, the project wants to build tools for ‘event driven’ automated payments and trading: ‘one of the great opportunities of blockchain technology is the concept of “programmable money”. The ability for entrepreneurs to create, trade and use digital assets globally will likely have the same impact as when people were able to create and consume information globally through the web’. According to the OAK team, this opportunity is not adequately exploited because “today most transactions on the blockchain are simple one-off events”. What OAK is aiming for is to create a DeFi hub to enable buying and selling transactions at certain prices or events as well as recurring transactions. In a nutshell, it is about creating tools for automated trading. Before offering itself as a parachain on Polkadot, OAK network tested its chain with the Turing Network project, a parachain on Kusama.

4. Bitgreen

The fourth new project that will be operational on Polkadot from October is Bitgreen. Already from its name, you can guess the distinct environmental vocation of this parachain. Bitgreen wants to offer itself to NGOs and Web3 projects to support important sustainability initiatives on topics such as renewable energy, forest conservation and the development and support of local communities. For example, Bitgreen enables the creation and trading of carbon credits.

Together with Sequester, another project that aims to provide tools to minimise the environmental impact of the Dotsama ecosystem, Bitgreen suggested to turn the parachains’ micro-fees into carbon credits. This initiative aims not only to make Polkadot’s ecosystem neutral but also positive in terms of its environmental footprint.

Bidding for the Polkadot No. 30 parachain auction is active from the 18th of October (17:53 UTC) for approximately five days. The winning project will win a slot on the Relay Chain usable from the 20th of November 2022 to the 25th of September 2024.

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Do Kwon maintains that the charges against him are invalid and that LUNA was never a scam but only a failure

Following the collapse of the Terra blockchain, its crypto LUNA and its algorithmic stablecoin UST ; the founder of the entire ecosystem, Do Kwon was charged by the South Korean government for violating the Financial Services Commission’s Capital Markets Act. An international arrest warrant has been issued in this regard and Do Kwon’s whereabouts remain unknown at the moment. What happened to the Terra founder after these accusations? Complaining about the misinformation and over-politicisation of the case, Kwon gave crypto journalist Laura Shin an interview on the 18th October 2022. He recounts his defence against the charges and explains his reasons.

What happened after the LUNA collapse: charges and arrest warrants

After Terraform Labs and Do Kwon were accused of violating South Korea’s financial markets law, the Seoul Southern District Prosecutor’s Office obtained an arrest warrant in September 2022 for Kwon, who had been living in Singapore since after the collapse of LUNA and UST. A few days later, the Singapore police stated that the crypto entrepreneur was no longer in the city-state and his whereabouts have since been untraceable. As a result, it was reported that Do Kwon was a fugitive. Subsequently, Kwon also received a ‘red notice’ from Interpol, i.e. an international arrest warrant asking local law enforcement agencies to locate and provisionally detain a person and make him available to the judicial authority that originally requested the arrest.

Do Kwon’s defence argues that the Financial Markets Act can only be applied to securities, and LUNA as a cryptocurrency is not legally a security. The accusation would therefore be unfounded, because Kwon and his company would not have done anything illegal. A spokesperson for Terraform Labs explained to the Wall Street Journal how South Korean prosecutors had broadened the definition of ‘security’ in response to public pressure over the bankruptcy of UST and LUNA, which has since been renamed ‘LUNA Classic‘: ‘We believe, as do most in the industry, that LUNA Classic is not, and never has been, a security, despite changes in interpretation that Korean financial officials may have adopted recently’.

What happened to Do Kwon, the founder of Terra?

To sum up, after the charges and various arrest warrants, Do Kwon:

1. Claims that the charges brought against him by South Korea are invalid since there is no real crypto regulation in the country;
2. Did not respond to the Interpol arrest warrant because he says he never received it in person;
3. Confirms that he is not a fugitive;
4. Reiterated that he had not set up any scam and that LUNA and UST were a failed market experiment;
5. Took full responsibility for the matter and apologised to the holders and supporters of the project.

Let’s look at these points specifically.

Where is Do Kwon?

In this delicate situation, Do Kwon unexpectedly gave an interview on the 18th of October with the aim of shedding light on the events and challenging some false information. This is the second time that Do Kwon has publicly exposed himself after the more than $40 billion collapse. The interviewer is Laura Shin, a crypto journalist who edits the podcast “Unchained” and recently published the book “The Cryptopians”, from which a TV series is to be made by producers Playground Entertainment.

The interview can be divided into two parts, the first focusing on the political and judicial events involving the founder of Terra, and the second on the technical aspects of the collapse of UST.

During the interview, Kwon reiterated the issue of ‘securities’, suggesting that the accusations by South Korea’s Financial Services Commission are not lawful and not even within their jurisdiction. In Kwon’s view, the case of the crypto LUNA is just a pretext to regulate the market by exploiting a moment of crisis. After all, he pointed out, there is no clarity among governments around the world on the issue: are cryptos securities?

Asked by Shin why he had not responded to the arrest warrant, Kwon explained that he had never personally seen this document and that news of his arrest warrant had only reached him through the media, and with contradictory reports. On the issue of ‘absconding’, Kwon repeated what he had already expressed in a tweet, namely that he is not hiding but does not want to reveal his whereabouts for security reasons. Since May 2022, Do Kwon received ‘visits’ and attempted break-ins at both his Singapore and Seoul residences from people embittered by the collapse of Terra. Therefore his whereabouts remain a mystery also to protect his family and associates. This is why Kwon has neither confirmed nor denied that he is in Singapore at the moment, while assuring that he is not a fugitive and is not making efforts to escape. Among other things, Kwon is not worried about losing his Singapore passport.

Do Kwon also denied reports that some of his funds (USD 67 million) had been blocked, claiming that the reports were untrue.

Do Kwon explains the causes of UST’s failure

Shin led the discussion on the reasons behind the failure of the UST algorithmic stablecoin, asking whether the algorithm was in fact insufficient to maintain the peg to the dollar. Do Kwon replied that the algorithm was fully functional and that in designing UST, the Luna Foundation Guard had never taken on the role of ‘market maker‘ to defend the stablecoin peg. However, its intervention had only been necessary on a few occasions. At one point Bitcoin reserves were used to bridge the volatility of UST. Kwon pointed out that Bitcoin (and Avalanche) purchases prior to the collapse had the sole purpose of making UST backed by all the large and promising cryptocurrencies.

For Kwon, the algorithmic stablecoin failed not because of the algorithm but because the economic system that supported it was not sufficiently robust.

Between the 7th and 8th of May 2022, when UST slowly started to lose its peg, Kwon didn’t think it was a big problem because stablecoins develop through cycles, and time would solve the problem. In the following days, he decided to use LFG funds to buy UST (buy-back) but in the meantime the price of LUNA dropped dramatically because people started to panic sell.

Kwon explained that, at the moment, the distribution of the LUNA 2.0 tokens is not proceeding as planned because the LFG is unable to dispose of its digital assets due to the ongoing process. He has no idea when the situation might be unblocked, Kwon is keen to emphasise that this is not a ‘refund’. Terra’s project has never been like a shop that provided goods in exchange for money and was ready to refund if it did not work out. Shin asked whether Kwon’s personal funds could help compensate for the losses and he replied that they would not be enough to make up the difference.

The intentions and regrets of Terra’s founder

Do Kwon, urged by his interviewer, took the opportunity to apologise to the people who lost money by believing in LUNA, saying that it is not at all easy to live with this responsibility. However, Kwon points out that LUNA was never a scam but only a market experiment gone wrong. He was the first to believe in the project and that he has always tried to build on the values of transparency and integrity. In short, failure does not necessarily mean scam. According to Kwon, it is his duty to provide a correct representation of the facts in order to put those who continue to work in the Terra ecosystem in the right light (he denies that he is still involved in the project).

Do Kwon concluded the interview by saying that his life is currently in a phase of reflection and that he will need a couple of years to humbly process and internalise what has happened: Terra, LUNA and UST ‘were never about money, fame, success’. Kwon continues to believe in the need for an algorithmic and decentralised stablecoin and is still keen to contribute being very young. Any regrets? Kwon would have liked to focus more on Terra’s technological development in the expansion phases rather than on the public relations part. He would also have liked to build a dialogue with people on social media instead of sounding a bit arrogant.

Paraphrasing, Kwon said ‘I think the hardest thing about the current situation is having to come to terms with an astronomical loss. It is difficult to put into words, but the magnitude of the financial, emotional and economic damage that has occurred is not easy to bear’.

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The Binance Smart Chain was attacked by a hacker, what happened? Here are the causes and price collapse of the BNB crypto

On the night between Thursday the 6th and Friday the 7th of October 2022, the Binance Smart Chain was attacked by a hacker. The perpetrator managed to steal around $100 million in different cryptocurrencies. Following the attack, the Binance team took prompt action, suspending transactions on the blockchain and thus severely limiting the amount of money that could have been stolen. Find out what happened to the Binance Smart Chain during the attack on Friday the 7th October 2022 and how the exploit affected the price of the BNB crypto.

What is the purpose of the Binance Smart Chain?

The Binance Smart Chain (BSC), is a blockchain created by Binance in 2019 that co-exists with the main Binance blockchain: the Binance Chain. What is the difference between the Binance Smart Chain and the Binance Chain? Unlike the Binance Chain, the BSC is compatible with Ethereum‘s virtual machine (EVM) and allows for the creation and use of smart contracts on its ecosystem ; hence the adjective smart within the name. Among the possibilities of an EVM-compatible blockchain is that of moving your tokens, fungible and non-fungible, to all blockchains of the same type almost instantaneously. A type of decentralised application (DApp) called a bridge is used for this purpose. Bridges have become very popular lately, mainly due to the tendency of Web3 projects to expand to other blockchains and thus become cross-chain. Friday’s attack took place on such a DApp, namely on the main bridge of the Binance Smart Chain: the Binance Bridge. Through this bridge, you can send your assets almost instantaneously to many other blockchains, including those of Ethereum, Polygon, Avalanche, Cronos, and many others.

What happened to the Binance Smart Chain?

But what exactly happened to the Binance Smart Chain bridge? Someone managed to tamper with the smart contract that is responsible for calculating the amount of tokens that users possess. In doing so, he set his quantity of BNB, the Binance crypto, to 2 million units. Subsequently, the hacker sent the huge sum of money to his wallet in two transactions of 1 million BNB each, about 560 million dollars in total.

Once the hacker received the BNBs, he then moved some funds to different compatible EVM blockchains so that Binance could not block them and ‘borrowed’ stablecoins on Venus, a lending protocol on the Binance Smart Chain. Fortunately, Binance was very quick to intervene and ‘paused’ the Binance Smart Chain, freezing the hacker’s wallets. Tether, the company that created the USDT stablecoin also acted quickly by freezing the funds the hacker had borrowed on Venus. Thanks to the speed of action of the two companies, the hacker only managed to steal USDT 100 million (approximately), roughly five times less than he had initially managed to steal.

Following the event, a debate broke out among the Web3 community, especially on the Twitter social network. The debate focused on the pros and cons of centralising Binance’s chains. The crypto company in fact limited the damage by blacklisting the hacker This is nothing more than an IT action aimed at blocking the possibility of transactions on a particular wallet. And this was possible thanks to the small number of validators that the Binance Smart Chain uses to approve transactions on its network. In a more decentralised network, it would not have been so easy to freeze a user’s wallet.

The price of crypto BNB following the hacker attack

BNB is the native crypto of the Binance Smart Chain. BNB is used to pay fees for carrying out transactions and interacting with Binance’s EVM blockchain. Following the hacker, BNB lost about 5.5% of its value in just over two hours. The attack occurred just as BNB was approaching the $297 resistance. The event caused a dump for the Binance crypto, as was to be expected. This drop did not last just one day, but continued for several days, bringing BNB down to the lower end of the range in which it has been moving since early September 2022, around the $272 price area.

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Stablecoins are arriving on Bitcoin thanks to the Taro protocol. What is it and how does it improve BTC’s blockchain?

Would you like to be able to take advantage of the security of the Bitcoin network to make and receive stablecoin payments? You will soon be able to do so, thanks to Taro! The 28th of September 2022 saw the release of the alpha version of Taro Daemon, an open source project developed by Lightning Labs that will allow digital assets to be created on the Bitcoin blockchain. What is Taro? An acronym for “Taproot Asset Representation Overlay”, Taro is a protocol built using Taproot, the most recent Bitcoin update, activated on the 14th of November 2021. The latest news about Bitcoin? Stablecoins are coming!

The problem to be solved: paying in Bitcoin must be cheap and fast

Bitcoin was created to enable peer-to-peer value exchanges in a fully decentralised system. The title of Bitcoin’s whitepaper is, ‘Bitcoin: A Peer-to-Peer Electronic Cash System’, i.e. a system with which to conduct transactions in a completely decentralised manner. With time, however, the so-called ‘digital gold’ has been less and less used as a trading currency and people have started to consider it a store of value. The reason for this lies in the intrinsic characteristics of the first cryptocurrency in history: Bitcoin’s core network is not very scalable.

When we talk about scalability within the Web3 world, we refer to increasing the speed of transactions and decreasing their cost. The more scalable a network is, the faster and cheaper transactions can be processed. In its early years, Bitcoin’s blockchain was quite scalable due to its low network congestion that did not slow down exchanges. This situation changed over time, and Bitcoin’s network became less and less efficient in these terms. This was due to the incredible popularity it has enjoyed in recent years, hence the increasing number of transactions to be handled and the resulting congestion of the network.

As is shown by the scalability trilemma, one of the most famous theorems for blockchain technologies, it is not possible for a network to be fully scalable, secure and decentralised at the same time. Each blockchain is driven to find a compromise to achieve all these qualities without sacrificing one specifically. Despite being a benchmark for security and decentralisation, Bitcoin has some weaknesses in guaranteeing the scalability of its network. However, the world of Web3 is constantly evolving: ecosystems and developers are always ready to offer innovative solutions. One of these is the Lightning Network, a Layer 2 of Bitcoin founded in 2016, which relies on the main blockchain and improves it in terms of scalability. The Lightning Network is able to process millions of transactions extremely cheaply, as opposed to Bitcoin’s main network, which only reaches a maximum of 7 transactions per second. In short, the Bitcoin Lightning Network groups a series of transactions into ‘packets’ that are then recorded on the Bitcoin network  instead of processing each transaction one by one. For these reasons, using the Lightning Network has become advantageous for paying in Bitcoin. So far, nothing new! Lightning Labs has a new protocol in store to further improve the transfer of value on the BTC blockchain. Let’s talk about Taro!

What is Taro and what is it used for?

Despite the great innovation given by the Bitcoin Lightning Network, the issue of volatility remains to be solved. Indeed, the price of BTC does not remain stable over time but is subject to market fluctuations. This could create some headaches both for users who want to pay in Bitcoin and for companies that might use them for their employees’ salaries in the future. Or for shops that accept cryptocurrency payments. Taro comes into play to solve this problem. But what is Taro? It is an open source protocol built by Lightning Labs that will enable the creation and use of digital assets, specifically stablecoins, on the Bitcoin blockchain. These digital assets will be either fungible tokens, the equivalent of what ERC-20s are for Ethereum, or non-fungible tokens (NFTs).

But how will Taro be able to create assets on Bitcoin’s blockchain? The creation and exchange of assets will be possible thanks to the Taproot upgrade, activated in 2021, and the data structure called Merkle Trees. Merkle Trees are a type of data structure that can store a lot of information and therefore easily prove their existence and veracity.

Today, digital assets such as tokens only reside on other blockchains due to easier implementation, lower transaction costs or greater scalability. Taro aims to change the current status quo. Taro’s ultimate goal is to transform Bitcoin into a multi-asset network. These assets will be able to be transferred on the Bitcoin network through on-chain transactions. Furthermore, tokens built through Taro will be able to be transferred instantly, at low cost, onto the Bitcoin Lightning Network. Is this an early preview of Bitcoin’s opening up  to DeFi? It is expected that most of these tokens will be transferred to the Lightning Network, especially the stablecoins to which Taro attaches the greatest importance. This is also evident from their communication on social networks.

The slogan that appeared on Taro’s Twitter profile is ‘bitcoinising the dollar’. In other words? Let’s bring the practicality of fiat currencies to the Bitcoin blockchain! This mission could help make the fundamental point of Bitcoin’s white paper come true: to allow exchanges of value without intermediaries in a fully decentralised system. With the activation of the Taro protocol, users will be able to hold both stablecoins, cryptocurrencies pegged to the dollar, and BTC on their wallets as well as being able to use both to make payments. The Lightning Labs team has not yet announced when the Taro update will be activated, but the entire Web3 world is buzzing. Who knows if one day Taro will also allow the creation of DeFi ecosystems or play-to-earn games on the most famous and long-lived blockchain ever.

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