Post-Merge relief; Zilliqa co-founder’s new brainchild

In Token Issue this week, we look at a new scalability solution from Zilliqa’s co-founder and analyze Ethereum’s historic technical upgrade. [Read from your browser]( Token Issue Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues [here]( or [sign up here]( to receive future newsletters. Written by Deepti Sri Journalist Hi {NAME} The Merge - the crypto world’s biggest software upgrade to date - has been completed successfully. This milestone injects a much-needed dose of optimism into the industry after months of market volatility and disappointing inflation rates. This landmark event has festival-like feel, and [institutional investors]( are also finding love in Ethereum as they expect higher returns after The Merge. While troubled lender Hodlnaut is freaking out because of the [potential liquidation]( of its assets, one of the newest kids in crypto town has set the stage to capitalize on Ethereum’s latest update. As part of this edition’s Big Story, we’re featuring AltLayer, a scalability solution built by the co-founder of Zilliqa, which was most famous for its use of sharding. -- Deepti  ---------------------------------------------------------------  THE BIG STORY [A look at Zilliqa co-founder’s ambitious blockchain project, AltLayer]( Blockchain’s scalability problem has been well-documented over the past few years. It’s a bottleneck in blockchain adoption as firms often have to cope with sudden “bursts” of traffic, which then results in congestion or service outages. Yaoqi Jia, the founder of Singapore-based AltLayer, has seen it all during his previous stints at Zilliqa and Parity Technologies. After a less-than-ideal departure from Zilliqa, Jia’s scalability solution stands out for several reasons. AltLayer helps blockchain applications to obtain extra processing capacity during periods of high traffic. More on this ambitious project in our subscriber-only analysis!  --------------------------------------------------------------- ⭐ TO THE STARS A look at what’s pushing Web3 forward. The Merge is here For an industry marred by a poor track record when it comes to environmental issues, The Merge is a positive development as it cuts Ethereum’s energy consumption by 99.5%. “And we finalized! Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today,” Ethereum co-founder Vitalik Buterin [tweeted](. Ever since The Merge, Ether supply has been dropping, switching the second-largest cryptocurrency into [deflationary mode](. That’s mainly because it has [stopped issuing mining rewards](. However, The Merge raises questions about rising censorship risk at the validator level. It also deals with concerns regarding centralization of staked Ether. Currently, Lido holds the largest amount of staked Ether at 31%, followed by Coinbase, Kraken, and Binance with a combined 30%, according to data by blockchain research firm Nansen. While these liquid staking firms were initially set up to reduce centralization by exchanges as they tend to gain the most staked Ether, it is now important for firms like Lido to become decentralized enough to avoid censorship. Given the success of The Merge and assuming later upgrades are effective, the next layer of companies will want to build on Ethereum as well because of transactions will become cheaper and faster. We might see a good number of decentralized apps (dApps) displacing banks and insurers. What’s next? The Ethereum community has lined up a Surge upgrade, which will break the blockchain into smaller segments that are easier to validate - another pull factor for the whales. On the other hand, some Ethereum miners haven’t given up. A [hard fork]( of Ethereum that retains proof of work is expected to be up about 24 hours after The Merge.  --------------------------------------------------------------- 🌙 TO THE MOON Tokens, NFTs, and yield generators we’re noticing. 1️⃣ [Doodles]( This project mints pastel-shaded NFTs, which are currently valued at nearly US$121 million. The 10,000-image collection is based on 100 visual traits that are all uniquely mixed and matched to form rare collectibles. Doodles recently raised US$54 million from Acrew Capital, FTX Ventures, 10T Holdings, and Reddit co-founder Alexis Ohanian’s Seven Seven Six. 2️⃣ [Sweat]( Sweatcoin, a popular fitness app that lets users earn virtual currency for walking or running, has launched its own token. Called Sweat, the new token is now live on the blockchain and listed on crypto exchange OKX. The firm’s investors include: Electric Capital, Jump, GSR, Near Foundation, and Spartan Capital. At the time of writing, Sweat is up about 9x from its [IDO]( price.  See also: [Our deep dive into StepN]( and our [list of walk-to-earn apps]( --------------------------------------------------------------- 🌏 BACK TO EARTH The week’s biggest roadblocks. [Rentable shuts down NFT renting shop]( Rentable is an NFT protocol that lets dApps such as Axie Infinity, Decentraland, and CryptoPunks rent out their jpgs.egs. The protocol will be shutting down after “failing to find “product market fit,” explained Rentable founder Emiliano Bonassi. He added that the project could not raise funds and got “close to zero” traction. This closure comes amid a bleak NFT market, where an NFT from Bored Ape Yacht Club (BAYC) that cost nearly 152 ether in April plunged to 105 ether just a few days later. The floor price has further dropped to 73.5 ether at the time of writing.  --------------------------------------------------------------- STILL A PONZI SCHEME The dark underbelly of Web3 and crypto today “I've been seeing a lot of "Send your ETH to this address to be upgraded properly" messages on YT livestreams. Scammers gonna scam.” — [Ninjarobot, Anonymous Twitter critic]( The tweet refers to an increase in the number of verified Twitter accounts that have been hacked and edited to look like that of Vitalik Buterin’s - Ethereum’s co-founder. In what appears to be in celebration of The Merge, these accounts have been used to spread a slew of fraudulent links to alleged Ethereum giveaways. Scammers have reportedly stolen over US$168,000 worth of Ether via several accounts and scam websites. The scam involved at least 36 verified Twitter accounts, including the 6 million-follower Cityarabia account that often tweets for Manchester City football club's Arabic-speaking supporters. --------------------------------------------------------------- MORE TO CHEW ON Essential news and views. 1️⃣ [Arrest warrant for Terraform Labs CEO]( South Korea has finally handed down an arrest warrant for Do Kwon in connection with the collapse of Terra’s stablecoin and sister cryptocurrency, which affected around 280,000 investors in the country alone. 2️⃣ [Singapore pauses crypto ads at F1 Grand Prix]( While the ban won’t apply to cars or to drivers’ uniforms, it will apply to advertising around the track. Since these ads are more directly aimed at locals, they are in breach of the city-state’s rules. 3️⃣ [Indonesian crypto exchange gets Coinbase’s backingÂ]( Reku, which allows users to buy and sell crypto assets, has raised US$11 million in a series A funding round led by AC Ventures, with participation from Coinbase Ventures and Skystar Capital. The platform says that it has the lowest fees among all exchanges in Indonesia. 4️⃣ [The Hodlnaut saga continues]( Algorand Foundation, a nonprofit company that supports the Algorand blockchain, declared a US$35 million exposure to embattled crypto lender Hodlnaut. Algorand said the funds represented less than 3% of its total assets, so it does not expect “operational or liquidity issues” from the exposure.  --------------------------------------------------------------- That’s all for this issue - we hope you liked it. WAGMI! P.S. 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