This article is featured in the latest issue of The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday.
Welcome to The Protocol, CoinDesk’s weekly wrap of the most important stories in cryptocurrency tech development. I’m Margaux Nijkerk, a reporter at CoinDesk.
In this issue:
FUSAKA GOES LIVE ON HOODI, ETHEREUM MAINNET NEXT: The final dress rehearsal for Ethereum’s forthcoming Fusaka upgrade occurred on Tuesday as the blockchain prepares for the mainnet hard-fork activation. The test, which went live around 18:53 UTC on the Hoodi testnet, involved passing a series of code changes meant to make Ethereum more scalable and cost-efficient. Testnets are replicas of a blockchain’s main network, giving developers a safe environment to test major upgrades and fix any issues before they go live on mainnet. Hoodi was the last of three testnets to run through a simulation of Fusaka, with two other successful test upgrades on the Holesky and Sepolia networks. Coming roughly six months after Ethereum’s Pectra upgrade, Fusaka introduces changes designed to cut costs for developers, users and institutions running on the network. Its centerpiece, PeerDAS, lets validators check only segments of data instead of full “blobs,” easing bandwidth demands and lowering expenses for both validators and layer-2 networks. — Margaux Nijkerk Read more.
BOB UNVEILS VAULT LIQUIDATION ENGINE: BOB (“Build on Bitcoin”) unveiled a new framework enabling bitcoin holders to borrow stablecoins against their BTC while keeping it secured on the Bitcoin network. The Bitcoin Vault Liquidation Engine addresses some persistent challenges in bitcoin lending, such as all-or-nothing liquidations and multiday settlements, founder Alexei Zamyatin told CoinDesk in a Telegram message. A vault, in the context of collateral and lending, is a smart contract that securely locks a user’s cryptocurrency as collateral for a loan. It acts as a trustless escrow, automatically managing the collateral and executing a liquidation (selling the asset) if its value falls too low. Applying this to bitcoin could transform the most secure and largest crypto asset into active collateral, unlocking trillions in BTC liquidity for use in the decentralized finance (DeFi) ecosystem without forcing holders to sell. BOB’s new design supports partial liquidation, meaning an entire position does not need to be liquidated if it goes underwater; only enough collateral to restore loan health is sold. — Jamie Crawley Read more.
LEDGER REBRANDS WALLET AND PRODUCT OFFERINGS: Ledger, the French firm known for its crypto hardware wallets, introduced a sweeping update to its product line, positioning itself for what it calls a new “era of ownership.” The company unveiled the Ledger Nano Gen5, a redesigned version of its signature device, along with Ledger Wallet, a reimagined version of its Ledger Live app, and Ledger Enterprise Multisig, a new platform for institutional asset management. The new Nano is designed to be more than a crypto wallet, the firm said. Ledger now calls it a “signer,” positioning the device as not only a venue for digital assets but also of digital identity in an AI-driven world. Ledger’s shift from calling its devices “wallets” to “signers” marks an evolution in how the company envisions what it says is at the core of security in the next digital age. The Ledger Nano Gen5 acts as a secure signing device for everything from crypto transactions to smart contracts and identity verification. — Margaux Nijkerk Read more.
GOOGLE WEIGHS IN ON QUANTUM COMPUTING AND BITCOIN DEBATE: Google said it achieved a verifiable “quantum advantage” with its Willow chip, completing a calculation that would take classical supercomputers thousands of times longer. The reported breakthrough may reignite a debate in the cryptocurrency community over the possible detrimental effects that quantum computing could have on Bitcoin, whose operation and security is built on cryptographic methods that quantum computing could potentially challenge. The chip reportedly simulated quantum chaos in just two hours by measuring Out-of-Time-Order Correlators (OTOCs), a key benchmark for tracking the unpredictable behavior of particles. Researchers say the achievement moves quantum computing closer to practical applications, such as Hamiltonian learning, where quantum machines could help model complex molecular structures beyond the reach of today’s tools. For the crypto world, the breakthrough is noteworthy, but not alarming. While quantum computing could one day challenge Bitcoin’s cryptographic foundations, most experts say that reality remains far off. – Jamie Crawley Read more.
