Shapella rings in a new Ethereum of hope

In this week's Token Issue, we analyze the Shanghai upgrade’s impact on Ethereum and discuss the potential short-term consequences for investors. [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 Crypto journalist Hi {NAME} The countdown was over, and the moment finally arrived. The Shanghai upgrade, also known as Shapella, was set to go live on the Ethereum mainnet. As the clock struck 6:27 a.m. SGT on April 13, a collective hush fell over the crypto world, waiting to see what would happen next. The release of ether worth a staggering US$34.5 billion was going to test the resilience and appetite of investors. With faster processing and lower fees for transactions, the upgrade was expected to make Ethereum more attractive to developers and more affordable for new users seeking non-financial Web3 services on the Ethereum blockchain. Moreover, with the potential for greater yields and the promise of innovation from direct and liquid staking solutions, the upgrade was bound to be a game changer. Shapella has been [confirmed as stable]( by developers, and ETH prices have been surprisingly resilient since the update. At the time of writing, ETH was up 1.6% and trading at $1,950, inching closer to the [eight-month high]( it hit last week. With the continued development and and upcoming major upgrade [EIP-4844]( Ethereum’s promising future may be in the cards. -- Deepti  ---------------------------------------------------------------  🤿 THE DEEP DIVE [Ethereum’s Shanghai upgrade: prepare for short-term volatility, prepare for long-term growth]( Building on the technical integration of the Beacon and Ethereum mainnet chains during last year's Merge, the Shanghai upgrade offers new features to attract investors and developers alike. However, as with any major update, short-term volatility was expected, with over 18 million ether becoming available. Although most experts predicted a limited impact on the market, investors were urged to brace themselves for potential market turbulence. To prevent any potential mass liquidations, a daily limit of 115,200 withdrawals has been put in place, and requests will be processed in the order received. While this may cause some short-term challenges for investors, the long-term opportunities the update presented are significant. One of the most exciting new features of the Shanghai upgrade is the ability to withdraw tokens. Investors now have greater flexibility in managing their holdings since they can sell or move their tokens as needed.  --------------------------------------------------------------- 👀 ALL EYES ON... What everyone’s talking about. [Klaytn to burn $1.3b worth of tokens on Monday]( The South Korean blockchain firm has announced that it will burn 5.281 billion tokens - meaning half of its Klay token supply - on Monday, April 17. The tokens will be taken from the 7.281 billion Klay reserve, created in 2019 to fund the expansion of the company’s ecosystem. The move is intended to minimize the risk of a sudden release of tokens, which was a concern for potential investors and developers. At current prices, the tokens that will be burned are worth approximately US$1.3 billion, which is equivalent to the GDP of a small country. Klaytn aims to become the go-to blockchain for metaverse and game developers. While it’s striving to become fully decentralized and permissionless, its main strength lies in high performance, and it’s not willing to sacrifice that to achieve decentralization. Klaytn’s transaction latency - averaging at 2.1 seconds - is the lowest among comparable public blockchains and puts it ahead of Solana. The company plans to expand its business by exporting successful use cases that have already taken off in South Korea, such as NFT-enabled membership cards for retail brands and the tokenization of real-world assets. Klaytn is also participating in the South Korean central bank digital currency project and intends to expand globally, particularly in Southeast Asia. [SushiSwap's fishy situation]( On April 9, SushiSwap was the victim of an exploit that resulted in a loss of approximately US$3.3 million. The attack occurred due to a bug in the RouterProcessor2 contract that was exploited by bad actors. The decentralized exchange (DEX) has provided an update on the incident and announced its plans to refund affected users. The funds were either taken by [whitehat security teams]( or lost to [blackhat hackers]( SushiSwap said in a tweet. The funds that reside in the whitehat contract can be claimed by users via a [Merkle Claim]( contract that SushiSwap is currently building. Meanwhile, recovering funds stolen by the bad actors will be a more complicated process. The SushiSwap team is setting up an opt-in claims process. Users who haven't interacted with the platform in the past ten days likely have no exposure, as the exploited contract is less than ten days old. After on-chain sleuths noticed the problem, the exchange’s "head chef" [Jared Grey]( recommended revoking the contract's permissions on all associated blockchains. However, the DEX isn’t without other issues, as the US Securities and Exchange Commission recently subpoenaed SushiSwap and Grey, prompting the latter to ask Sushi [DAO]( to fund a US$3 million USDT legal defense.  --------------------------------------------------------------- ⭐ TO THE STARS Impactful developments and projects in Web3. 1️⃣ [PayPal ex-president’s Bitcoin scaling solution]( Lightspark, a Bitcoin infrastructure company founded by former Paypal president David Marcus in 2022, has unveiled its Lightning Network platform. The platform aims to provide an easier way for market participants to connect to the Lightning Network and to support instant Bitcoin transactions. Last year, Lightspark raised about US$173 million at a valuation of almost US$1 billion. Marcus believes that the Lightning Network's capacity is currently limited by the time-consuming process of node management and engagement, and that Lightspark's product suite will enable the platform to be easier to use. By allowing [off-chain transactions]( the Lightning Network can improve transaction speed and lower costs, making it a more practical option for smaller payments. 2️⃣ [MetaMask takes the hassle out of buying crypto with fiat]( MetaMask, a provider of crypto wallets and decentralized applications (DApps), has launched a new feature that allows users to purchase cryptocurrency directly from its [Portfolio DApp]( using fiat currency. The "Buy Crypto" feature offers more than 90 tokens across eight different networks and supports payments with debit and credit cards, PayPal, bank transfers, and instant [ACH transfers](. The service takes into account the user's location and local regulations to provide a customized quote for each purchase. Once the user has selected a quote, they will be redirected to a third-party provider's website to complete the transaction. The funds will be deposited directly into the user's MetaMask wallet. --------------------------------------------------------------- MORE TO CHEW ON Stuff that’s good to know. 1️⃣ [CryptoGPT aims to monetize user data via AI & NFTs]( CryptoGPT, a zero-knowledge (ZK) Layer 2 blockchain, raised US$10 million in a series A funding round led by DWF Labs. The company is valued at US$250 million and is focused on artificial intelligence. The firm will use the fresh money to grow its development team and expand in Asian markets. CryptoGPT aims to allow users to monetize their data across fitness, dating, gaming, and education through the ZK-rollup Layer 2 blockchain as well as Alex, the firm's Web3-focused AI assistant. 2️⃣ [Korean prosecutors seize $5.3m of Do Kwon's assets]( Do Kwon, who has been accused of cryptocurrency fraud and was recently arrested, is now facing an asset freeze in South Korea. The prosecutors are seizing Kwon's assets - worth nearly US$5.3 million - and tracing criminal proceeds that he allegedly transferred to various cryptocurrency exchanges and Swiss bank accounts. Kwon, the co-founder of Terraform Labs, had been on the run for 11 months and is being investigated for alleged fraud and tax evasion. 3️⃣ [LayerZero bags $120m to expand messaging protocol in Asia]( LayerZero Labs has bagged US$120 million in a series B funding round, allowing it to expand to Asia Pacific. The company enables cross-chain messaging across various blockchains, with 30,000 contracts deployed on its testnet and 3,500 on its mainnet. The crypto messaging protocol firm plans to increase its headcount, with 20% of 30% of the new hires expected to be from Asia Pacific, and to deepen ties with developer and consumer communities across the region. 4️⃣ [Former Huobi CEO joins HashKey Group]( Livio Weng, formerly Huobi Global CEO, has been named as the group COO of Hong Kong-based crypto firm HashKey Group. Weng will lead the company's efforts in becoming a reputable and fully compliant global Web3 network. This appointment follows HashKey Group's recent successful efforts in securing licenses in Singapore and Hong Kong, including a virtual asset trading license and an in-principle approval for fund management services.  --------------------------------------------------------------- That’s all for this issue - we hope you liked it. WAGMI! P.S. 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