Arbitrum is one of Ethereum’s layer-2 scaling solutions designed to improve smart contracts’ efficiency and transaction execution on the network while reducing fees drastically and adding extra privacy features. L2 networks are software that sit on top of the base layer of a blockchain like Bitcoin or Ethereum to boost the platform’s efficiency and offer inexpensive transactions. In recent years, Ethereum’s surge in the development and adoption of Web3, nonfungible tokens (NFTs) and decentralized applications (DApps) has resulted in the platform’s excessive congestion leading to skyrocketing fees. Different solutions have been explored to resolve Ethereum’s scalability, including layer-1 dedicated upgrades. …

Decentralized identity protocols Several identity protocols, from crypto startups to big tech solutions, deal with decentralized identification, and each has its specifics and features. Though the decentralized identity technology is fairly new, initiatives and players in the decentralized identity space, software for implementing decentralized identity wallets and supporting services are plentiful. They range from the Hyperledger open-source developing community, through a range of decentralized identity protocols and startups, to some of the biggest names in the industry. Decentralized identity protocols and private identity stores such as uPort or 3Box are called identity hubs. Recently, the Ethereum-based uPort platform split into …

Decentralized crypto derivatives exchange dYdX says it has ended its short-lived and contentious $25 first deposit bonus promo, amid a wave of backlash over its facial recognition requirements for new users. The exchange however simply cited “overwhelming demand” as the reason for its short-lived promotional campaign, which ended on Sept. 1 “effective immediately.” Due to extremely overwhelming demand of the $25 deposit bonus promotion, we are ending the campaign, effective immediately. Thank you to the many thousands of new users that onboarded to dYdX today. We truly underestimated the amount of interest the campaign garnered. — dYdX (@dYdX) September 1, …

Many users on social media have been lambasting decentralized exchange dYdX over the identification verification process to receive a sign up and deposit bonus of $25. In a Wednesday blog post, dYdX announced that new users who deposited 500 USD Coin (USDC) for their first transactions could receive a bonus promotion of 25 USDC, provided they were willing to do a “liveness check.” According to the exchange, the verification process accessed a user’s webcam and “compares if your image has been used with another account on dYdX.” Though the giveaway was completely voluntary, many on Twitter implied the checks were …

The Ethereum network will be able to withstand censorship risks both in the short and long term, according to Ethereum community member and investor, Ryan Berckmans. The ban of Ethereum-based privacy tool tornado Cash by U.S. authorities earlier this month left many wondering whether Ethereum transactions could be also at risk of censorship, especially after Ethereum’s imminent transition to a proof-of-stake system. A widely spread concern is that entities controlling a large chunk of staked Eth, such as Coinbase or Kraken, would start censoring transactions in order to comply with U.S. sanctions. That is an unlikely scenario according to Berckmans, …

How to keep your seed phrase safe A crypto seed phrase in the wrong hands can do damage, so it is advisable to always ensure it is safe. The following are some tips for ensuring your seed phrase is secure. Never share your seed with anyone else: It’s extremely important that you never reveal your recovery phrase to anyone. Why? Because if someone else finds out your recovery phrase, they will be able to access — and therefore control — your crypto funds. Make a note of it on paper and keep it in a secure location: This is the …

Things have not been looking too good for the crypto market in recent months, with the market seemingly being gripped by one piece of bad news after another. To this point, on Aug. 8, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued legal sanctions against digital currency mixer Tornado Cash. As per the regulatory body, since the platform’s inception in 2019, it has been used for a host of illicit money laundering activities estimated to be worth $7 billion. Of this sum, it is estimated that $455 million was controlled by the notorious Lazarus …

FTX has reportedly begun blocking accounts that have sent coins through Zk.money, a private layer 2 chain provided by the Aztec Network on Ethereum. According to Twitter users, FTX has identified the DApp as a mixer — a service it deems a “high-risk activity” prohibited by the exchange. Reports of blocked transactions on FTX began appearing on Twitter on Thursday, sometimes with commentary about FTX’s motives and allegations that Zk.money is not a mixer. Twitter users also noted that blocking transactions connected to the protocol may imply a ban with far-reaching effects, similar to the sanctions imposed by the United …

Ksenia Malik, the wife of Tornado Cash creator Alexey Pertsev Wife has lashed out at Dutch authorities for treating her husband like a "dangerous criminal" following his arrest last week. The Dutch Fiscal Information and Investigation Service (FIOD) arrested Pertsev on Aug. 12 over an alleged use of the Ethereum-based privacy tool to launder money and conceal criminal financial flows. Speaking to Cointelegraph, Malik confirmed that Pertsev remains in the hands of Dutch authorities and has not had the chance to contact him since he was put behind bars. “He’s kept in prison as if he were a dangerous criminal,” …

While some think the Tornado Cash ban may negatively impact other projects focusing on privacy, others believe that these projects will keep pushing forward and keeping their commitments to anti-censorship and decentralization. In an interview with Cointelegraph, Ahmed Ghappour, the general counsel at the privacy-focused project Nym Technologies, shared insights on the importance of privacy in the crypto space, how to balance the interests of regulators and people who want privacy and what's next for privacy in Web3. According to Ghappour, there are contradictory concepts in the Web3 space. This is the promise of returning data ownership to the people …

The United States' move to sanction the open-source code that makes up the Tornado Cash privacy protocol may be shocking, but it’s not surprising. America has been tightening her grip over the global financial system for decades, ostensibly to cut down on bad behavior, but also to project power abroad. Economic sanctions, like the ones enforced by the aptly named Office of Foreign Assets Control, are a powerful weapon. The agency’s website states that it “enforces economic and trade sanctions based on U.S. foreign policy and national security goals.” It does this to fight drug dealers, terrorists, and “other threats …

There are mounting concerns that recent United States government sanctions against Tornado Cash will become a “slippery slope” for Web3 privacy that could eventually make the entire space “meaningless.” Speaking to Cointelegraph, Shumo Chu, co-founder of privacy protocol Manta Network expressed worry that the strict sanctions against Tornado Cash could have a knock-on effect on every Web3 protocol including ones providing privacy. Chu is one of the co-founders of Polkadot-based Manta Network, a layer-1 privacy protocol that enables private transactions in decentralized finance (DeFi). Tornado Cash (TORN) is an Ethereum (ETH) privacy protocol that anonymizes coin transactions. These protocols are …