News
13
Feb
ethereum

This website has affiliate links. We may receive compensation if you visit partners we recommend. Read more about our advertising principles from the About Us page.

2/13 News Roundup: Dencun, ERC-404, Monero, Celsius, FTX, Bitcoin ETF

Ethereum’s Dencun update was scheduled for March this year. ERC-404 is the new hot token standard! Binance delisted the private coin Monero. Celsius and FTX begin refunding their customers. Blackrock and Fidelity dominate the Bitcoin ETF race in the US.

Ethereum’s Dencun Update

Ethereum’s Dencun update got an official schedule last week. Dencun will be launched on Ethereum’s MainNet on March 13. The name Dencun comes from the star Deneb and the Mexican city of Cancun, where Ethereum’s Devcon 3 event was held.

Dencun is part of Ethereum’s update process towards the so-called Ethereum 2.0 state. Previous significant updates have included:

  • Beacon Chain: December 2020
  • The Merge: September 2022
  • Shapella: April 2023

Beacon Chain was a Proof of Stake blockchain launched alongside Ethereum’s Proof of Work blockchain. In The Merge update, PoW was dropped once and for all. This meant the end of Ethereum mining. In the Shapella update, the staked ETH tokens were finally unlocked.

Dencun consists of nine different updates. In the Ethereum community, updates are called EIP, which stands for Ethereum Improvement Proposal. The most significant of the updates is EIP-4844. It includes an update called Proto-Danksharding. This name comes from Ethereum developer Dankrad Feist and the alias “Protolambda.”

The upcoming update is a step towards sharding. Sharding is a technology that allows Ethereum to scale to the level of its competitors. With sharding, the blockchain is split into smaller parts called shards. Ethereum will implement the Dankrad Feist version of sharding, i.e., danksharding.

The Dencun update makes Ethereum Layer 2s (Optimis, Arbitrum, Base, etc.) cheaper and more efficient. This is done with the help of a new data type called binary large object (blob). In the future, Layer 2 data will be stored inside blobs when transferred to the Ethereum blockchain.

Blob is a cheaper and more efficient way to store data than the current one, and blobs are automatically deleted after a couple of weeks. Because of this, they also put less load on the nodes of the Ethereum network.

Dencun is primarily an update concerning Layer 2s. The transaction costs of the Ethereum MainNet will not get cheaper with Dencun. This will only happen when the sharding technology is implemented. Before then, there will be more updates, like Dencun.

The Coin Bureau channel has published a comprehensive video on YouTube about Dencun, which is worth checking out.

ERC-404 is a new and exciting token format

Let’s continue with news related to Ethereum. A new token standard, ERC-404, entered the social media discussion in February. It is an exciting novelty that combines NFTs and traditional Ethereum tokens.

Currently, there are two main types of tokens on the Ethereum network:

  • ERC-20: All common tokens like Tether, Chainlink or Shiba Inu
  • ERC-721: NFTs (also ERC-1155 is used)

ERC-20 tokens work like euros or other cryptocurrencies. They can be broken into fractions, and one USD Coin or Shiba Inu in your wallet is worth as much as the equivalent token in someone else’s wallet. The ERC-721 format is used to create NFTs. It is a unique token that cannot be split into smaller parts.

ERC-404 links ERC-20 and ERC-721 formats to each other. Click on the image in the embed below to get more information on the topic.

The most popular implementation of ERC-404 technology is called Pandora. In practice, it works as follows:

  • Pandora contains 10,000 regular ERC-20 tokens linked to 10,000 NFTs.
  • ERC-20 tokens can be traded like any other token.
  • For example, you can buy 0.25 Pandora tokens, allowing you to own an NFT partially.
  • If you buy at least one whole Pandora token, your wallet will be automatically minted with the NFT linked to it.
  • If you sell Pandora tokens so that your holdings fall below one whole token, the NFT will be destroyed from your wallet.

The exciting thing about the technology is that every time at least one PANDORA token is sent from one wallet to another, the NFT is re-minted. And the newly minted NFT may be of a rarer type than before. This enables the so-called NFT re-roll.

ERC-404 is a really interesting concept. It is an experiment developed by the Pandora project that has not progressed through the official Ethereum Upgrade Process (EIP). In this respect, it is similar to the Ordinalas protocol that shook the Bitcoin world a year ago.

Pandora’s price rose from hundreds to more than 30,000 dollars at its best. Currently, one Pandora token costs around $22,000. It is not listed on well-known exchanges, but trading is possible on the decentralized Uniswap exchange.

Binance delists Monero

The world’s most famous private crypto, Monero, has been the weakest-performing cryptocurrency in the top 100 list in the last seven days. Almost the entire crypto market is on profit, but Monero’s XMR token is currently around 17 percent on minus.

The reason for Monero’s decline can be found in Binance. The world’s leading cryptocurrency exchange announced last week that it will soon remove Monero from its selections. The decision was unsurprising, as private cryptos have been in regulators’ sights for several years. As a result of the announcement, Monero’s price fell by more than 30% but has since recovered.

Monero’s official X account made the following post related to the topic.

Monero leaving Binance does not mean the end of XMR trading. The well-known exchanges, e.g., Gate.io, KuCoin, and Kraken, still list Monero. However, it would not be surprising if this trio removed Monero from their selections, too.

In the future, trading of private cryptos will probably move to decentralized exchanges.

From the point of view of an ordinary investor, private cryptos are perhaps the worst possible investment target. The regulatory pressure described above slowly drives them away from the biggest exchanges, making buying private cryptos challenging.

The market also clearly shows that investors are not interested in private cryptos. Monero is the only privacy coin that can fit into the top 100 list, and its price is 76 percent below the ATH. Other private cryptos have disappeared from the headlines in recent years. So is Monero, if you don’t consider news related to crypto exchange de-listings or crime.

Private cryptos will never disappear from the market. They have their fan base, and perhaps privacy will become a significant trend one day. While waiting for that, there are much better investments on the market.

Celsius and FTX begin paying back to creditors

Crypto lending service Celsius and the FTX exchange were the biggest names in the bankruptcy wave that shocked the crypto industry in 2022. Both companies served millions of customers whose funds have been locked up in bankruptcy proceedings for over a year.

Surprisingly, both Celsius and FTX are returning billions of dollars worth of funds to their creditors. Many believed they would lose every penny.

Celsius announced two weeks ago that the company has undergone bankruptcy proceedings and will return three billion dollars to its creditors. This means a return of about 58%, but for some cryptos, the figure is significantly lower (e.g., Bitcoin 30%).

The mining company Ionic Digital Inc. will also emerge from Celsius’ bankruptcy, whose shares the investors will receive. It is expected to be listed on the US exchange. The reason for this company is Celsius’ significant investments in Bitcoin mining, which have not been liquidated.

The good news for the creditors of the FTX exchange is that FTX intends to return the funds to its customers 100%. This was indeed a positive surprise for many!

The bad news for customers is that FTX will return the funds priced at the time of the bankruptcy. If you owned one Bitcoin in FTX, which was priced at around $20,000 at the time of the event, you will get a $20,000 refund. At today’s price, your bitcoin would be worth $50,000.

In recent months, there have also been rumors about the restart of the FTX exchange. These plans have now been abandoned.

What happened to the founders of Celsius and FTX? The Celsius CEO, Alex Mashinsky, is waiting for the trial to begin. The trial of FTX exchange CEO Sam Bankman-Fried began in October 2023, and the man will receive his final sentence at the end of March.

Blackrock and Fidelity dominate the spot Bitcoin ETF market

The first spot Bitcoin ETFs in history were approved in the United States a month ago. There had already been futures-based ETFs on the market, which do not directly affect the price of Bitcoin. But, spot ETFs acquire genuine bitcoins when their shares are purchased.

ETFs caused significant selling pressure on the Bitcoin price for the first two weeks. The reason was the enormous sales of the Grayscale (GBTC) ETF shares. One of the sellers was the FTX bankruptcy estate, which we mentioned in the previous chapter. Grayscale’s outflows averaged $500 million daily, often higher than the total inflows of all other spot Bitcoin ETFs.

However, the trend reversed on January 25. That was the first significant drop in GBTC sales, and the combined flow of spot ETFs has been net positive ever since.

Below is data collected by Bitmex Research from last Saturday.

As you can see from the table, on Thursday and Friday of last week, there was a total inflow of 405 and 542 million dollars, respectively. It’s no wonder Bitcoin’s price has been rising for the past few days.

Blackrock and Fidelity have dominated new ETFs since the beginning. Blackrock now controls $4.2 billion of bitcoins, and Fidelity controls $3.5 billion. The other new ETF entrants control $2.6 billion in assets.

Grayscale is still the overwhelming market leader at $22 billion. This is because Grayscale converted its long-standing fund into an ETF. Grayscale has lost $6.4 billion worth of investments.

The US spot Bitcoin ETF now holds just over $34 billion of bitcoins. Measured in Bitcoin, this translates to more than 680,000 BTC. New ETFs (other than Grayscale) have collected nearly 217,000 BTC during the month.

AboutBitcoin Team

Hey! We're the AboutBitcoin squad, a team of crypto lovers who've been all about cryptocurrency since 2017. Every week, we drop the latest news and cool insights from the crypto world. Come hang with us as we dive into the crazy, ever-changing scene of cryptocurrencies – it's gonna be an awesome adventure!