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BUTERIN SAYS STABLECOINS HAVE DEEP FLAWSVitalik Buterin, co-founder of Ethereum, said the crypto industry has yet to solve some of the most fundamental design problems behind truly decentralized stablecoins, arguing that many existing systems rely on fragile assumptions that can fail over time. In a post published on Rather than promoting a specific project or proposing a new stablecoin, he described the post as a critique of how decentralized stablecoins are designed and why those designs may not hold up in the long term. At the most basic level, stablecoins are cryptocurrencies designed to maintain a stable value, usually by pegging to the US dollar. While some are issued by companies that hold dollars or dollar-equivalent assets, decentralized stablecoins strive to maintain stability through code, collateral, and market incentives. Buterin’s first concern was that most decentralized stablecoins still rely on the US dollar as a reference point. While he acknowledged that following the dollar makes sense in the short term, he argued that systems intended to withstand political or economic shocks should not be tied to a single national currency indefinitely. In the long run, he wrote, even moderate inflation could erode the usefulness of a dollar peg. Buterin suggested that future stablecoins could instead track broader price indexes or purchasing power measures, rather than just the dollar. The second problem Buterin highlighted concerned oracles – the mechanisms that provide blockchains with real-world data such as asset prices. Because blockchains do not have direct access to external information, they rely on oracles to report prices used by smart contracts. According to Buterin, if an oracle can be manipulated by someone with sufficient capital, the entire system becomes vulnerable. — Siamak Masnavi Read more.
ZCASH DEVELOPER STOPS, TOKEN FALLS: Electric Coin Company (ECC), one of the main development companies behind the privacy-focused crypto network Zcash, says its entire team has left after a dispute with Bootstrap, a nonprofit created to support the network. The token, ZEC, fell almost 14% in the 24 hours after the announcement. Josh Swihart, CEO of ECC, wrote on Swihart said ECC staff were “constructively dismissed,” arguing that employment conditions had changed in ways that made it impossible to do their jobs “effectively and with integrity.” Constructive dismissal occurs when employees resign because circumstances have changed so seriously that staying on becomes unrealistic – even if they have not been formally dismissed. — Shaurya Malwa Read more.
‘SMART CASHTAGS’ COMING TO X: Elon Musk’s social media platform In a post on Bier said users can tap these tags directly from their timeline to view real-time price data and all related mentions of that asset. “X is the best source for financial news – and hundreds of billions of dollars are being wagered based on the things people read here,” Bier wrote, adding that the company is gathering feedback as it focuses on a possible public release next month. Solana Labs highlighted the crypto implications shortly after Bier’s post, saying that Smart Cashtags would allow users to tag Solana-based tokens and view charts and related information directly on X. In a screenshot shared alongside that post, it appears that users who type a dollar sign are asked to select from a list of assets – including cryptocurrencies like bitcoin, BONK and Base – suggesting posts could be linked to asset-specific pages with prices and related discussions. — Siamak Masnavi Read more.
BTC’S DEFENSE AGAINST QUANTUM COMPUTING: Media coverage of the threat posed by quantum computing typically identifies cryptocurrencies as a key area of classical cryptography that will be effortlessly breached when the technology hits the mainstream, which some estimates suggest could be less than a decade from now. Simply put, computer chips based on quantum mechanics can perform some calculations exponentially faster than a traditional processor. That speed threatens much of existing cryptography, which is based on the time it takes to solve complex equations. Not surprisingly, there is a push to identify approaches that can mitigate risk, a point glossed over in much of the “parallel universe” reporting on the latest quantum chips. One such effort to develop quantum-resistant algorithms is to replace current public key encryption with an alternative known as lattice-based signing. One approach to protecting the $2 trillion Bitcoin blockchain has been unveiled by post-quantum cryptography specialist BTQ Technologies (BTQ): Bitcoin Quantum, a permissionless Bitcoin fork it says will meet the challenge. This is a public, executable testnet where miners, developers, researchers and users can stress-test quantum-resistant transactions and uncover operational tradeoffs before a mainnet-level migration conversation becomes urgent, according to Chris Tam, BTQ’s head of quantum innovation. The system includes a block explorer and a mining pool, which provide instant accessibility. – Ian Allison Read more.
In other news
- A collapse in the price of ether would damage the Ethereum ecosystem’s ability to function as a settlement infrastructure for financial activity, a Bank of Italy economist has found. That would harm payment, settlement and tokenized financing systems, such as stablecoins and onchain lending services, that rely on the blockchain for ordering transactions and confirming asset ownership, Claudia Biancotti wrote in a new research paper. Biancotti investigated how an extreme fall occurs ETH could impact Ethereum’s functionality instead of treating the network as just a speculative crypto market. She noted that disruptions under stress would affect applications that process billions of dollars of transactions every day. The proof-of-stake blockchain relies on validators, who are paid ETHto secure the system. If ether were to lose most or all of its value, Biancotti argues that some validators would, quite rationally, close. That would reduce the amount of stakes securing the network, slow down block production and weaken Ethereum’s resistance to certain attacks. The finality and reliability of transactions can decrease at the precise moment when users rely on the network the most. The article models this dynamic as a shift from market risk to infrastructure risk. It is a framework that reflects how regulators increasingly view blockchains. Ethereum is no longer just a platform for speculative tokens, but a settlement layer for stablecoins, tokenized securities and other financial instruments. — Shaurya Malwa Read more.
- For Bryan Johnson, the entrepreneur who sold Braintree (and Venmo) to PayPal for $800 million, the transition from fintech to the “fountain of youth” is not a pivotal point, but a logical progression. Although Johnson is now the public face of Project Blueprint, a rigorous sustainability protocol, he sees his interest in crypto as part of the same fundamental struggle. In Johnson’s view, inflation and aging function as invisible taxes. Inflation quietly erodes purchasing power over time, just as aging steadily erodes the body’s biological capital. “Aging has the same philosophical underpinnings as inflation,” Johnson said on CoinDesk’s Gen C podcast. “Both are the slow death of an intelligent system.” Johnson’s ties to the crypto industry run deep. He was an early partner of Coinbase when he ran Braintree and experimented with bitcoin payments when the user experience was still “clunky” and poorly understood. At the time, he said, the goal was not ideological, but infrastructural. Braintree wanted to be “indifferent about where the money came from” and simply take care of the rails. Johnson’s career in payments, which culminated in an acquisition by PayPal in 2013, was always a means to an end. Growing up in a working-class community in Utah, he realized early on that trading time for money was not the life he wanted. Payments offered leverage, scale and speed. It created a path that later allowed him to focus on what he calls “species-level problems.” — Sam Ewen Read more.