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Nov
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News Summary 11/30: Cardano, Jerome Powell, EIP-4488, and Jack Dorsey

The popular trading platform eToro has announced that it is removing Cardano from its selection. Jerome Powell remains as the Fed chairman. Ethereum EIB-4488 could bring relief to high gas fees on Ethereum. Jack Dorsey has announced his resignation as CEO of Twitter.

eToro removes Cardano from U.S. customers

The lack of clear crypto regulation in the U.S. has been a hot topic this year. When it comes to crypto legislation in general, the high average age of decision-makers is often a problem. This often results in a poor understanding of cryptocurrencies as well as technological development.

Last week, the popular trading platform eToro unexpectedly announced that it would remove Cardano and Tron from its platform. For the time being, this measure only applies to U.S. customers. It hasn’t been possible to buy ADA tokens since the 26th of November and the ADA staking will also end shortly.

Cardano founder Charles Hoskinson shares his views on the video below.

Hoskinson thinks the incident is the result of unclear regulation. At the moment Cardano must have conversations with each exchange separately.

The contradictory situation is illustrated by the fact that at the same time as eToro removed the cryptocurrency from its selections, Bitstamp added it to its own selections.

eToro’s decision is presumably related to U.S. regulation. The company commented on the decision with very few words: “These changes are due to business-related considerations in the evolving regulatory environment.”

There has been speculation that eToro might have been tipped off about the SEC’s soon-coming attack on Cardano. Many people have a fresh memory of the SEC’s lawsuit against Ripple in December 2020. The case is still ongoing in court. Could Cardano be the next victim?

The ADA token didn’t suffer much from the incident. Its price fell by around 10% along with the rest of the market on the day of the announcement.

Jerome Powell continues as the Fed chairman

The chairman of the U.S. Federal Reserve (Fed) is arguably one of the most influential people in the world, at least in the economic sphere. The statements of the Fed chairman are listened to carefully and have a great impact on the development of the markets.

Jerome Powell, the president of Fed, was nominated for a new term last week. The term of office is four years at a time. In the next video, former Fed insider Danielle DiMartino Booth analyzes the situation.

There was more drama behind the curtains than ever before. There were many other options for the Fed president too. In the end, the Biden administration ended up electing Powell for a second term. Probably any other name would have caused unpredictable action in the financial markets.

Powell’s election should be good for the crypto markets too. Powell is not making any sudden moves that would lead to a sudden fall in the stock market. The ongoing party of zero interest rates and cheap money is likely to continue for at least a while. This is a good thing from the point of view of both, stocks, and cryptocurrency investors.

Many of Powell’s opponents had also an interest in pushing the universal basic income (UBI) model into the United States. This would have meant speeding up the central bank’s own digital currency schedule.

It is difficult to say whether the so-called Fed coin would cause problems for cryptocurrencies. Be that as it may, it is probably better from the investor’s point of view that this issue does not need to be dealt with just yet.

It is clear that the cryptocurrency market has benefited enormously from the loose monetary policy. So far, it looks like this party is still going on.

Ethereum’s EIP-4488 update

Ethereum’s transaction fees have become one of the hottest crypto topics recently. The growing popularity of the DeFi sector and stablecoins is stretching Ethereum’s transaction capacity. As a result, transaction fees have become very high, which in turn has driven small investors to other platforms.

The EIP-1559 update, released in August, did not solve this problem in any way. At the moment, transaction fees are higher than ever before. The EIP-1559 update burns tokens with each block, but it does not help to unload the blockchain.

The upcoming Ethereum 2.0 version should solve the problem in the future. The first phase, titled “The Merge”, will not scale the network just yet. Polygon and other Layer 2 solutions will have to bring relief in the meanwhile. These options can be explored at l2beat.com.

The latest problem is that transaction fees have started to grow on Layer 2 as well. Vitalik Buterin, the founder of Ethereum, has proposed an EIP-4488 update as a solution to the problem.

Layer 2 solutions are a bit like Bitcoin’s lightning network. They can be used to ease the transaction load from Ethereum’s main chain. Layer 2 solutions use Ethereum’s main chain for data validation.

The EIP-4488 update would fix the gas fees needed by Layer 2 solutions. He gave following comments regarding the proposal.

The cost of rollup txns is a function of the data they post back to the Ethereum mainnet.. If a rollup compresses X transactions and pays Y gas fees to commit it to mainnet, the cost of rollup transactions is a function of Y/X. To do this, rollups add calldata to their transactions, which is currently priced at 16 gas per byte. If we reduce the calldata cost, then we reduce the cost of rollup transactions.

Only a limited amount of transaction data can be fitted in one Ethereum block. This limit is achieved with a so-called gas limit. If the fees of L2 solutions are reduced, more data could be included in one block.

At the same time, the size of one Ethereum block in bytes would increase even severalfold. The larger the block is, the more transaction data it stores. This will result in faster blockchain will growth.

This in turn causes additional pressure and higher requirements for the network nodes. The higher the hardware requirements are for nodes, the fewer small investors can participate. This in turn leads to a network centralization.

Buterin argues that the size of the block could be increased safely without threatening the decentralization of the Ethereum network.

Jack Dorsey resigns as the CEO of Twitter

Twitter founder Jack Dorsey announced that he is stepping down as the CEO of Twitter. You can see his tweet regarding this decision below.

Jack Dorsey is one of the world’s most famous Bitcoin supports. Dorsey and Elon Musk are arguably the best-known advocates of cryptocurrencies in the corporate world. Two months ago, Twitter made headlines with its new tipping feature, which leverages the Bitcoin lightning network.

Dorsey’s other publicly listed company, Square, has also acquired about $450 million worth of bitcoins in its balance sheet.

Twitter is one of the most important social media platforms for cryptocurrencies. Now there is tension in the cryptocurrency world when investors try to figure whether Dorsey’s follower is a cryptocurrency fan too. Could Dorsey also exit Twitter in order to work full-time with Bitcoin?

Parag Agrawal, former CTO of Twitter, has been named as the new CEO. According to first impressions, Agrawal has a positive view of cryptocurrencies. Though, he is not the kind of Bitcoin maximalist Dorsey was. This may be a good thing for the crypto sector overall. You can read more about it here.

We don’t know yet where Jack Dorsey is heading next. It is good to remember that his other “project” Square is not some hot dog stand either. This is a listed company with a market value of approximately USD 115 billion. It is possible that Dorsey will start building Square into the world’s largest Bitcoin company.

On Twitter, Dorsey quarreled with too many important people. This was also reflected in the market reaction. Twitter’s stock price started to rise sharply after Dorsey’s resignation.

Photo by Souvik Banerjee on Unsplash

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