# Signum Newsletter 18

> Weekly alpha for your weekend reads

**Published by:** [Signum Capital Newsletter](https://paragraph.com/@signumcapital/)
**Published on:** 2024-10-25
**Categories:** cryptocurrency, venturecapital
**URL:** https://paragraph.com/@signumcapital/signum-newsletter-18

## Content

This edition of the newsletter dives into Kakarot, a project that is developing a highly efficient proving engine to secure and scale blockchains. This technology empowers developers to build a more interconnected and trustless digital ecosystem, where transactions are verified without compromising privacy or security. Kakarot's vision extends beyond Ethereum, with plans to bring the benefits of zero-knowledge proofs to Bitcoin and other blockchain networks, ultimately paving the way for a future where provability is the norm. We'll also share some interesting articles, portfolio updates and market highlights.1. Research Articlesa) AI Chatbots Behind The Latest Memecoin Trend + GOAT: The Gospel of Goatse • Memecoins, driven by strong fan communities, are gaining traction among AI Agent with Truth Terminal leading the charge as a semi-autonomous AI Agent that has created its own religion and it has even endosed $GOAT which was a memecoin created by a dev on pump.fun and now represents the tokenized representation of Truth Terminal. • Two of crypto's hottest narratives: AI and memecoins finally converge AI Chatbots Behind The Latest Memecoin TrendTokens created for Terminal of Truths, an AI millionaire chatbot, and Fi, a female AI character, may be the start of the latest trend among memecoinshttps://www.forbes.comGOAT: The Gospel of GoatseWhy Truth Terminal is an asymmetric bet on society's growing fascination with autonomous AI agentshttps://www.chainofthought.xyz b) Pump.fun's $150M Windfall: Innovation or High-Stakes Gambling? • Pump.fun is a platform that has revolutionized the meme coin market by making it more accessible and user-friendly. By lowering barriers to entry and promoting transparency, Pump.fun has attracted a large user base and generated substantial revenue. • However, the platform faces challenges such as security risks and competition from other platforms, and it must continue to innovate and adapt to remain a leader in the meme coin space.Pump.fun's $150M Windfall: Innovation or High-Stakes Gambling?Meme coin investments are among the most volatile and high-risk segments in the cryptocurrency space, with extreme price swings often leading to significant financial exposure.https://insights4vc.substack.com c) Crypto’s Incentive Misalignment Problem • The misaligned incentives in crypto can hinder its growth and adoption. While some market participants prioritize short-term gains, neglecting long-term sustainability, others suffer from the lack of transparency and accountability. • To address this issue, the community should promote transparency, hold bad actors accountable, and explore innovative token vesting designs.Crypto's Incentive Misalignment ProblemThanks to Jordi Alexander, 0xngmi, Proph3t and Hildobby for reviewing the article and providing feedback, with special thanks to Robin Davids for the brainstorming over the past months.https://sergiogallardo9.substack.com2. Portfolio Highlightsa) Polymer Labs • To scale on-chain dApps to the level of web2 giants like Uber, we must prioritize the development of efficient interoperability solutions that enable seamless communication between rollups and provide a robust, high-performance network infrastructure. • By addressing these challenges, we can unlock the full potential of web3 and create a new generation of decentralized dApps that offer the same level of performance, scalability, and user experience as their centralized counterparts. Polymer LabsToday's blockchains are fast, but to replicate Uber's global functionality on-chain, you'd need thousands of the MegaETH-equivalent rollups cohesively operating with hardware running at max capacity. For reference, Uber's analytical backend processes 100+ petabytes of data (1 petabyte = 1,000,000 gigabytes) with minute latency across 20+ database systems processing different workloads at scale, supported by global data centers and the cloud.https://www.polymerlabs.org b) Infrared Finance • Infrared will be the go-to infrastructure to simplify participation in Proof of Liquidity (PoL) on Berachain, enabling users to stake, earn, and manage liquidity more efficiently through products like iBGT and iBERA. • PoL revolutionizes blockchain security by making liquidity provision a core part of the network's security model, creating powerful new opportunities for applications and users alike. By providing tools that make PoL more accessible, Infrared aims to contribute to the growth of a dynamic, innovative DeFi ecosystem on Berachain. Why we're betting on Proof of LiquidityAt Infrared, we're heads down building infrastructure to unlock the full potential of Proof of Liquidity (PoL). Our products, including iBGT and iBERA, seek to further simplify participation in PoL, enabling users to stake, earn, and manage liquidity more efficiently. But why is PoL so important, and what makes us so confident in its future?https://infrared.finance c) Tap Protocol • Tap Protocol launches their $TAP token and it is listed on both CEXes (Gate, MEXC, KuCoin) and DEXes (Uniswap and Taprooswap) • Some steps on how to transfer and swap: - Use either a Unisat or Xverse wallet and load it with $BTC - Each $TAP needs to be inscribed first before it can be transacted, inscribe at OrdinalsBot or TaparooMarket - $TAP can then be traded on marketplaces on-chain (such as TaparooMarket or SatX) or sent directly to Gate or MEXC (both supports the ordinals version of $TAP) - $TAP can also be bridged to Ethereum using Taparoo Bridge and swap it on Uniswap or transferred to KuCoin (supports only the ERC-20 version of $TAP)Tap Launch Preparation Q&AIn order to prepare to the launch of the TAP token, we wanted to have this medium to answer the question that comes frequently on socials. At 12:00 UTC on the 23rd of October, we will be airdropping...https://medium.comTap Protocol Q&AIn order to prepare to the launch of the TAP token, we wanted to have this medium to answer the question that comes frequently on socials At 12:00 UTC on the 23rd of October, we will be airdropping...https://medium.com d) Arrakis Finance • The CVMM problem: Centralized Vertically-Integrated Market Makers (CVMMs) have gained dominance in onchain markets, extracting profits from retail users. Arrakis aims to address this issue by building a Decentralized Vertically-Integrated Market Maker (DVMM). • HOT AMM: As the core of the DVMM, HOT is an MEV-aware AMM that uses a hybrid order type system to minimize MEV extraction and offer better returns for liquidity providers (LPs). HOT's unique features, such as signed quotes and a dynamic fee model, ensure fair prices, non-toxic volume, and reduced LVR for LPs. HOT, the MEV-Aware AMM Built to Empower LPs, Is LiveTL:DR HOT, the MEV-aware, intent-centric AMM built on Valantis, is live now. Arrakis developed HOT to empower LPs and make onchain markets more sustainable. HOT breaks new ground in MEV recapture and the AMM design space and its launch marks a step forward for the DeFi ecosystem.https://mirror.xyz e) Particle Network • Chain abstraction (ChA) and account abstraction (AA) are both designed to improve Web3 user experience, but they address different problems. ChA tackles fragmentation across multiple chains, while AA focuses on making accounts more programmable for features like social recovery and gas sponsorships. • While AA hasn't seen widespread adoption yet due to limitations in the dApp ecosystem, ChA has the potential to accelerate AA adoption by providing a user-friendly, chain-agnostic experience. This could lead to a future where both technologies work together to simplify Web3 interactions for developers and users. The Synergy of Chain Abstraction and Account AbstractionExplore the similarities and key differences between chain abstraction and account abstraction, and how their synergy accelerates Web3's growth.https://blog.particle.network f) Glacier Labs • Glacier is a data-centric blockchain designed to supercharge AI. It consists of three main components: GlacierDB (data storage), GlacierAI (AI tools), and GlacierDA (data availability) • The network runs on nodes, including Validator Nodes and Worker Nodes (DA, TEE Computation, Indexer). Verifier Nodes oversee the network, ensuring security and integrityGlacier Network Newest DocumentationWe are thrilled to announce the release of Glacier Network's latest documentation, now featuring in-depth sections on Glacier technical architecture and node mechanisms. This enhanced edition is...https://medium.com g) Thala Labs • Thala Labs offers boosted farming where $veTHL lockers can now earn 3x boost multiplier on some eligible farms Thala @ThalaLabs Calling all farmers on @Aptos and beyond – boosted farming on Thala is finally here! In addition to 90%+ APR, veTHL lockers can now earn supercharged yields and access up to 3.0x boost multiplier on eligible LP farms. 48 12:12 • 25 Oct 2024 h) Kakarot • Kakarot Labs is dedicated to developing products at the intersection of ZK and EVM and they will be launching their key product: an efficient EVM proving engine soon Kakarot ZK-EVM @KakarotZkEvm Connected by ZK, Standardized by EVM: A thread At KKRT Labs, we believe the future of blockchain growth is driven by two foundational technologies: Zero Knowledge (ZK) and the Ethereum Virtual Machine (EVM). Our efforts to realize this future are already underway, and… 79 0:24 • 23 Oct 2024 3. Kakarot - Don’t Just Trust - Prove It.Unlock the power of ZK proofs to validate not just some things, but anything! Introduction We envision a future where blockchain underpins a global financial system and operates as a decentralized supercomputer. Prioritizing fundamental principles is essential to realizing this vision. However, the current landscape falls short in delivering core values like transparency, verifiability, and trustlessness. Instead, we grapple with issues such as centralized Layer 2 solutions, frequent bridge hacks, and concentrated validator control. To create a truly cohesive and borderless internet of value, we must emphasize self-custody, decentralization, scalability, and verifiability. These principles are not mere ideals; they are vital for constructing a resilient infrastructure that enables people and communities to coordinate seamlessly across borders. This digital evolution, driven by zero-knowledge proofs, will pave the way for a more secure and decentralized ecosystem. Kakarot Ethereum, the leading settlement layer, has spurred a wave of scaling initiatives. While these efforts vary in commercial and technological success, they've significantly advanced research and development, particularly in zero-knowledge proofs, the most promising scaling solution for the EVM. Projects like zkSync, Starknet, and Mina exemplify this trend, demonstrating the potential of zk-proofs to enhance the blockchain ecosystem. The Kakarot team is committed to developing the most lightweight and efficient proving engine in the blockchain space, prioritizing maximum performance while minimizing resource consumption. This groundbreaking engine will facilitate the convergence of key technologies, bringing us closer to a fully provable blockchain environment. Kakarot's proving engine will enable EVM provability across diverse domains, including Layer 2 solutions, EVM-compatible blockchains, sidechains, and EVM-compatible rollups on Bitcoin. Reiterating the importance of zk technology for blockchain scalability At its very core, zero knowledge enables compression of computation. Particularly when implemented through zero-knowledge proofs, it is a game-changer for blockchain scalability. In existing implementations and architectures, there are two primary methods to verify that an on-chain action was executed correctly: a) Re-execution of computation In decentralized networks, the only way to guarantee accuracy is to re-execute the action independently. For example, a user running a Bitcoin full node downloads each new block and verifies every transaction to ensure the block's validity. b) ZK proof verification With ZK, users can verify a proof that confirms a particular action was performed correctly, without re-executing the entire process. The primary advantage of this approach is the exponential efficiency of proof verification compared to re-executing the entire computation. In ZK-powered networks, nodes only need to validate proofs confirming the correct execution of transactions, significantly reducing costs and resource consumption. This principle underpins the scalability of ZK-rollups. A key challenge, however, is ensuring the underlying network, such as Ethereum, can trust the legitimacy of rollup transactions. The solution lies in generating cryptographic proofs that mathematically certify transaction validity. Zero-knowledge proofs (ZK-proofs) enable this by allowing the network to verify transaction integrity without re-execution. This approach is also crucial for cross-network interoperability, especially as the industry moves towards a multi-chain future. With a rollup-centric roadmap encompassing Ethereum, Bitcoin Layer 2s, and Solana extensions, multiple networks will inevitably coexist. ZK technology facilitates trustless and asynchronous interaction and communication between these diverse ecosystems. The zkEVM For any rollup that leverages the Ethereum Virtual Machine (EVM) and benefits from Ethereum's inherent properties, EVM smart contract compatibility is crucial. This compatibility ensures that transactions, on-chain interactions, and dApps are not only mathematically secure but also optimized for execution. The need for seamless integration and enhanced security has given rise to the concept of the "zkEVM." Early on, Kakarot identified the limitations of achieving EVM compatibility with Cairo and decided to build a zkEVM. By creating an EVM layer on top of Starkware's Virtual Machine, Kakarot aims to address compatibility bottlenecks and improve the integration of EVM capabilities within the Starknet ecosystem. Since Starknet's native smart contract language, Cairo, is not EVM-compatible, it presents a significant barrier for developers and applications seeking to build on this cost-effective and high-performance zkRollup. By implementing a zkEVM, Kakarot eliminates this barrier, making it easier for developers to deploy EVM-based solutions on Starknet. At its core, Kakarot is creating a zkEVM implementation in Cairo, enabling the provable verification of transactions. This functionality is driven by the CairoVM, a Turing-complete, provable CPU architecture that forms the backbone of Kakarot. As a smart contract deployed on Starknet, Kakarot can execute arbitrary EVM bytecode, seamlessly deploy EVM-compatible smart contracts, and call functions of Kakarot-developed EVM contracts. Effectively, Kakarot serves as a sophisticated EVM bytecode interpreter. By providing an Ethereum-compatible JSON-RPC interface, developers can effortlessly deploy any Solidity or EVM-based code on Kakarot, just as they would on Ethereum itself. Kakarots key design advantages a) Lightweight and Modular Design By building the EVM on top of an intermediary ZK-VM like Cairo, rather than using specialized circuits, Kakarot can adapt rapidly to changes within Ethereum, such as Shanghai and Dencun earlier this year. Additionally, by leveraging the CairoVM, Kakarot brings EVM compatibility to the Starknet network, effectively bridging the gap between EVM-native applications and the Starknet ecosystem. b) Efficiency and Performance By enabling EVM-based applications to deploy natively on Kakarot's zkEVM, they can fully leverage the technological improvements and innovations developed by Starkware. The upcoming STWO prover, for instance, will deliver a performance boost of several orders of magnitude (~1000x) compared to the current STARK prover. Kakarot's design allows for easy implementation of such advancements without introducing additional costs or computational complexities for application developers.The Grand Vision: Achieve Provable EVM Executions Across the Entire Ecosystem Kakarot + ETH = kethWith its latest product advancements, Kakarot is setting its sights beyond bridging the EVM and Starkware ecosystems. The project is driving a bold vision to fully integrate and unify these ecosystems, unlocking new possibilities for developers and accelerating the adoption of cutting-edge zero-knowledge technology. Keth Poised to emerge as a leading proving engine, bringing "STARKification" to every EVM-equivalent network, including rollups and appchains. Its primary goal is to facilitate the transition from Optimistic to ZK-rollups by employing a sidecar model that cryptographically proves each transaction within an Optimistic rollup, offering a more efficient and secure scaling solution. Additionally, Keth will enhance existing EVM ZK-rollups by leveraging Starkware's technological advancements, providing a more cost-effective and high-performance proving stack. With the advanced capabilities of STWO, the proving engine behind Keth, this solution promises to achieve significantly superior performance levels compared to current provers. This exponential improvement sets a new standard for efficiency and scalability in the proving landscape. Furthermore, Keth will accelerate the adoption of Stage 2 architecture across rollups by enabling multi-proof systems. This innovative approach allows rollups to validate their integrity using multiple simultaneous provers, such as Keth, Succinct's Reth, or TEEs. As a result, Keth ensures robust security and consistent state validation while mitigating the high costs typically associated with traditional proof systems. By realizing this vision, Kakarot's first major application will enable EVM execution on Starknet, a leading ZK-rollup scaling solution developed by Starkware. By enabling developers to write smart contracts in both Solidity and Cairo, Kakarot bridges the gap between Ethereum's familiar EVM environment and Starknet's high-performance infrastructure. This interoperability makes it easier for EVM-based dApps and bluechip infrastructure to seamlessly launch on Starknet, while allowing Starknet-native protocols to reach EVM users. Beyond rollups, the emergence of various appchains has highlighted ongoing challenges with composability and interoperability across networks. Kakarot's product suite aims to address these bottlenecks by introducing provability across a network of appchains, ensuring seamless integration and interaction. Positioned to compete with solutions like ZKSync's ZK Stack and Polygon CDK in terms of speed and cost, Kakarot's stack will empower a new breed of appchains that leverage Starknet's underlying infrastructure while delivering the best EVM practices, enabling a more interconnected and efficient blockchain ecosystem. Verifiability on Bitcoin As the number of Rollups and general scaling solutions for Bitcoin grows, the ecosystem faces fragmentation challenges similar to those experienced by EVM-based Rollups and appchains. However, with the reintroduction of the OP_CAT module, Starkware plans to extend the Starknet network to Bitcoin, making it the first Layer 2 to settle transactions on both Bitcoin and Ethereum. This integration enables ZK-STARK proofs to be directly verified on Bitcoin, paving the way for enhanced scalability with improved security and integrity, akin to the benefits ZK-rollups offer Ethereum. Kakarot's proving engine will enable proof and transaction verification on Bitcoin. Similar to the approach of transitioning Optimistic Rollups to ZK-rollups, Kakarot will enable self-custody and minimize trust requirements for BTC-bridged assets, unlocking trust-minimized DeFi on Bitcoin. Furthermore, Kakarot will add EVM execution capabilities to Starknet as it settles on both Ethereum and Bitcoin, ultimately transforming Starknet into the first ZK-EVM Layer 2 on Bitcoin. Conclusion In conclusion, Kakarot is pioneering a vision for global EVM provability. At the heart of this initiative is its advanced proving engine, designed to deliver efficient and secure transaction verification across various applications, including Layer 2 solutions, EVM-compatible blockchains, and Bitcoin rollups. Kakarot aspires to establish a future where provability is the norm across all blockchain environments, fostering a decentralized and interconnected digital economy. By prioritizing a trust-minimized and cryptographically secure framework, Kakarot is building a resilient infrastructure that facilitates seamless collaboration and coordination on a global scale. This article was written by 0xNiko.

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