# Privacy Matters, 23

By [Automata Network](https://paragraph.com/@automata-network) · 2023-12-21

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gm, readers.

At [Automata](https://www.ata.network/) we work on protecting privacy and fairness. And in this newsletter, we find more reasons to talk about it. Explore headlines and catch up on the biggest crypto news in Web3 privacy.

**This week:**

*   A former Ledger employee [fell victim](https://twitter.com/Ledger/status/1735326240658100414) to a phishing attack, leading hackers to publish a malicious version of Ledger Connect Kit, resulting in a DeFi-wide token approval exploit across DApps like Zapper and SushiSwap
    
*   Flooring Protocol was [exploited](https://twitter.com/FLC_FlooringLab/status/1736233859350667479), resulting in $1.54 million worth of NFTs being stolen
    
*   LayerZero v2 [launches](https://twitter.com/LayerZero_Labs/status/1735344758619553814) across 42 testnets with the mainnet targeted for January 2024
    
*   Astria [launches](https://twitter.com/AstriaOrg/status/1735374705690067045) an EVM rollup powered by Celestia’s data availability
    
*   Namada [offers](https://www.theblock.co/post/267807/cosmos-layer-1-namada-token-testnet-users) 3% of its total supply to incentive Testnet participants
    
*   Coti to [transition](https://cointelegraph.com/news/enterprise-blockchain-coti-shifts-to-ethereum-privacy-centric-layer-2-in-2024) into a privacy-centric Layer-2 solution on the Ethereum network in 2024
    
*   Aztec Sandbox, [designed](https://x.com/aztecnetwork/status/1734251870842175974?s=20) for developers to build and test privacy-first applications easily, has entered its Alpha phase
    
*   Manta [announces](https://x.com/MantaNetwork/status/1735268753984864349?s=20) New Paradigm, a yield-bearing Layer 2 on Ethereum
    

**Op-Ed:**

*   Cointelegraph [explores](https://cointelegraph.com/explained/what-are-stealth-addresses-and-how-do-they-work) how stealth addresses empowers users to carry out anonymous transactions, safeguarding against potential monitoring of financial activities and enhancing privacy
    

**Zooming into ZK:**

*   Activity [spikes](https://cointelegraph.com/news/inscriptions-evm-frenzy-clogs-up-blockchains) on zkSync and other chains amidst the ongoing inscription craze
    
*   Polygon Labs [discontinues](https://twitter.com/0xPolygonLabs/status/1735737260299997256) support for Polygon Edge in favor of Polygon CDK
    
*   Vitalik Buterin [proposes](https://notes.ethereum.org/@vbuterin/enshrined_zk_evm) an ‘enshrined zkEVM’ to bring some Layer 2 functions back on Ethereum
    
*   Manta [uses](https://mantanetwork.medium.com/manta-pacific-becomes-first-ethereum-l2-using-celestia-as-modular-da-d29cafc37cdd) Celestia for Modular Data Availability
    
*   Cronos [launches](https://twitter.com/cronos_labs/status/1735225214034915686) Cronos zkEVM on the testnet
    
*   Chainlink data feeds [available](https://www.coindesk.com/tech/2023/12/14/chainlink-data-feeds-available-on-polygon-zkevm/?_gl=1*qa17a3*_up*MQ..*_ga*MTc1MzgyODk5Mi4xNzAzMDU1ODcz*_ga_VM3STRYVN8*MTcwMzA1NTg3My4xLjEuMTcwMzA1NjAzMy4wLjAuMA..) to developers building on Polygon’s zkEVM
    
*   Zcash founder Zooko Wilcox [steps down](https://www.coindesk.com/tech/2023/12/18/zcash-developer-electric-coin-ceo-zooko-wilcox-steps-downs-swihart-named-to-role/?_gl=1*nzbqa8*_up*MQ..*_ga*MTc1MzgyODk5Mi4xNzAzMDU1ODcz*_ga_VM3STRYVN8*MTcwMzA1NTg3My4xLjEuMTcwMzA1NjAzMy4wLjAuMA..) as CEO of Electric Coin
    
*   Masa [announces](https://www.coindesk.com/tech/2023/12/13/protocol-latest-tech-news-crypto-blockchain/?_gl=1*qv6q8c*_up*MQ..*_ga*MTc1MzgyODk5Mi4xNzAzMDU1ODcz*_ga_VM3STRYVN8*MTcwMzA1NTg3My4xLjEuMTcwMzA1NjAzMy4wLjAuMA..) the launch of its ZK data marketplace on Avalanche Subnet
    

**Conversations you missed:**

*   DappRadar [chats](https://x.com/DappRadar/status/1735557765957829087?s=20) with Linea on its latest developments and future plans
    
*   Oasis [hosts](https://x.com/OasisProtocol/status/1735787609153249722?s=20) End of Year Community Town Hall to review achievements in 2023
    
*   ATOR [organizes](https://x.com/atorprotocol/status/1737141479150166503?s=20) State of the Union 2024 on X Spaces
    

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**We dive into the details, so you don’t have to:**

On December 14, Ledger experienced an exploit on Ledger Connect Kit, a Javascript library to connect crypto hardware wallets to third-party dApps. Frontends of various DeFi protocols became vulnerable, including SushiSwap, Balancer, and revoke.cash. Approximately $600,000 was siphoned after malicious code rerouted user assets to the hacker’s wallets. Ledger has since responded by pushing out a genuine software update, and has pledged full reimbursement to all users impacted, including non-customers, by the end of February 2024. The hardware wallet manufacturer is also enacting changes to its signing process with plans to disable blind signing by next June.

Data from a [Dune dashboard](https://dune.com/hildobby/inscriptions) indicates that nearly 42% of gas usage on zkSync was spent on inscriptions over the past week. The impressive resurgence in inscription tokens have clogged up EVM chains, leading to fee hikes and partial outages on networks including Avalanche, Arbitrum, and Cronos.

Vitalik Buterin floats the idea of "enshrined ZK-EVM" to improve scalability on Ethereum's Layer-2 protocols. The concept involves embedding a ZK-EVM directly within the Ethereum network to enhance efficiency and security in verifying Layer-1 Ethereum blocks, streamlining the current reliance on external verification processes. The design prioritizes compatibility, data availability, auditability, and upgradeability, aligning with Ethereum's multi-client philosophy. Despite its complexity, Buterin advocates for an open multi-client system for its flexibility, and emphasizes the need for speed in ZK-EVM implementations.

Connect with Automata on both [X (Twitter)](https://ata.ws/twitter) and [Discord](https://ata.ws/discord).

This newsletter is for informational purposes only. It is not intended to be a substitute for professional financial advice or interpreted as investment advice. Cryptocurrencies are volatile assets and you should always do your own research before making any informed decisions when investing or trading.

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*Originally published on [Automata Network](https://paragraph.com/@automata-network/privacy-matters-23)*