The crypto landscape from May through June has been dominated by the buzz surrounding memecoins and US regulatory actions. However, it's crucial to remember that while these headline-grabbing developments occur, there's a steady undercurrent of progress within the asset class on a global scale. This includes everything from burgeoning trends such as Exchange-Traded Funds (ETFs) to innovations in LSDFi protocols, all contributing to pushing the envelope in the industry.
Memecoins have led to a palpable surge in on-chain activity. This sharp rise has, in turn, propelled the Ethereum network's gas fees and the amount of ETH burnt to levels that we haven't witnessed since Ethereum's pivotal shift to a Proof of Stake mechanism.
On another front, the Ethereum network has been witnessing intriguing dynamics. Despite widespread apprehensions about a potential "death spiral" and a massive ETH selloff stemming from the activation of staked ETH withdrawals, the reality has painted a vastly different picture. Contrary to the feared exodus, we've seen an influx of participants eager to stake, leading to a new staking validator entry queue extending beyond 40 days.
Meanwhile, the withdrawal queue remains largely inactive. This presents an open window for any participants wishing to withdraw their ETH, offering them the freedom to do so at their convenience. Clearly, there's a great deal to look forward to. Encouraging trends and robust mechanisms are quietly shaping the future of the crypto world, promising exciting times on the horizon!
Total Crypto Market Cap: $1.235T (+5.02%)
DeFi TVL: $46.82B (-0.01%)
Stablecoins: $127.62B (-1.24%)
The leading Layer-2 blockchain, Arbitrum, underwent a 2-hour shutdown, followed by another hour-long interruption in transaction processing during the beginning of June, all due to a glitch in its Sequencer. But what are Sequencers really?
A Sequencer is a specially designated full node that, under normal conditions, is responsible for submitting users’ transactions onto Layer 1 (the Ethereum Mainnet). They can take different forms - in the particular case of Arbitrum One, it is a single and centralised entity controlled by Offchain Labs. However, there are plans to eventually distribute the sequencing power to a decentralised committee that can reach consensus on transaction ordering. In addition, it operates under its own security assumptions and cannot derive security directly from L1.
The Sequencer can receive a user’s transaction in two ways — either directly via an RPC request, or via the underlying L1. In the case of a well-behaved Sequencer, a user submits the signed transaction directly to the Sequencer, which then executes it and delivers a receipt. The Sequencer later includes the user’s transaction in a batch and posts it on L1, achieving finality. However, if the Sequencer is not functioning properly, a user can bypass the Sequencer entirely to submit any Arbitrum transaction directly from L1. This mechanism preserves censorship resistance even if the Sequencer is being completely unresponsive or even malicious.