Crypto Asset Explained

Crypto assets refer to digital assets with value and ownership protected by blockchain and cryptographic technology. Iconic crypto assets include cryptos like BTC and ETH, stablecoins such as USDT and USDC, as well as NFTs covering BAYC and CryptoPunks.

The Significance of Managing Crypto Assets

In the legacy financial system, common strategies of asset management include:

1. Storing funds in trusted and low-risk banks, with well-protected accounts and passwords.

2. Keeping cash and valuable items in safes and safeguarding safe combinations or keys.

3. Entrusting funds to third-party asset managers.

4. Purchasing insurance to protect assets against unforeseen events.

In the crypto space, however, none of the above strategies are feasible. Crypto assets represent a novel form of digital assets with decentralized characteristics. What this means is that once our cryptos are stolen in a security breach, they are almost irrecoverable. In this context, finding ways to manage crypto assets efficiently and securely has become a top concern for crypto investors.

In the crypto context, security management means the secure storage of private keys and mnemonic phrases. In the world of crypto, access to the private key and mnemonic phrases is equivalent to control over the assets stored in the corresponding address. Service providers like wallets and exchanges are, therefore, divided into decentralized and centralized platforms, depending on whether the private key is managed by users or the platform.

For investors, there are chiefly two ways to manage crypto assets: third-party custody and self-custody.

Third-party Custody

There are several modes of third-party crypto custody, which include:

1. Depositing crypto assets on a centralized exchange for centralized custody, which allows investors to trade freely on the exchange.

2. Storing crypto assets in a centralized wallet that can help users retrieve their assets through alternative means in case the private key is forgotten.

3. Entrusting all crypto assets to a crypto trust.

Self-custody

While third-party custody offers great convenience, it also carries security risks. For instance, investors face the risk of losses if they keep their assets on an unreliable centralized platform or custodial agency. This is also why many investors still favor decentralized self-custody. Self-custody options mainly include:

• Mobile wallets: Non-custodial wallets running on mobile devices.

• Wallet extension: Non-custodial extension wallets running on web browsers like Chrome.

• Desktop wallets: Non-custodial wallets running through client software on computers.

• Hardware wallets: Offline wallets that store private keys independently on a piece of hardware.

Decentralized self-custody wallets have become the preferred choice of many crypto investors, as they don’t depend on the security performance of third parties.

One example is ViaWallet, a decentralized self-custody wallet app that supports a wide range of cryptos and NFTs. Additionally, the wallet also features versatile functions such as staking, mining, DApp browser, convenient swaps, and transaction acceleration. Download ViaWallet and access the one-stop solution for managing your cryptos: https://viawallet.com/

ViaWallet now offers:

• Support for 49 blockchain networks, over a million tokens, multiple public-chain NFTs, and full compatibility with EVM;

• Built-in staking, convenient swapping, and a range of asset management services;

• Advanced tools including transaction acceleration, signature verification, and authorization checks;

• Integration with DApp browsers for over 10 public chains, providing a comprehensive gateway to the Web3 ecosystem.

ViaWallet is very beginner-friendly, as it features a detailed beginner’s guide, as well as a help center and blog that offer straightforward, intuitive content to equip newbies with wallet and blockchain know-how in no time. In this guide, we are going to show you how ViaWallet is used step by step.

Creating New Wallets

To get started, you need to download the ViaWallet app on your smartphone. iOS users can find the app on the App Store, while Android users can get ViaWallet from Google Play or download the APK file at https://viawallet.com/.

Once the app is downloaded, you can begin creating your blockchain wallet, which is the account for storing your blockchain assets. Creating a blockchain wallet on your own can be quite complicated, which is why most users choose to register an account through wallet apps.

After installing the app, tap “Create Wallet” to start creating your blockchain account:

1. First of all, set your security password, agree to the user agreement, then tap “Next” to proceed. We recommend a combination of 6 to 32 English letters and numbers. It should be noted that this password is used for unlocking and managing the app on the current device, and a new security password should be created if the wallet is imported to another device.

2. Tap “Backup” after you have learned and ticked each security tip. Write down the mnemonic words in the order of 1 to 12, and tap “I’ve backed up” to verify. Choose “Switch” if you need to change a set of mnemonics. Mnemonics are crucial, as anyone with access to your mnemonics can import your wallet and transfer your assets. A wallet has only one set of mnemonic words, and they cannot be changed. Losing the mnemonics means losing access to your cryptos stored in the wallet, and neither ViaWallet nor anyone else can have them recovered. To prevent loss or theft, therefore, it is vital to keep the mnemonic words secure.

3. Select the words corresponding to the serial number as required, and then tap “Verify” to create your wallet.

Importing Existing Wallets

If you already have a wallet before using ViaWallet, you’re likely familiar with the wallet import process. Upon opening ViaWallet for the first time, tap “Import” or go to “Me” -> “Manage Wallet” -> “Import” to access the wallet import page. From there, select the multi-chain wallet or the single-chain wallet for the crypto you wish to import and enter the previously backed-up mnemonics or private key to import your wallet.

This is all the information you need to get started with ViaWallet. With our step-by-step guide, you will be able to manage and trade your cryptos and interact with all kinds of Web3 apps. Have fun in the world of Web3!

Just recently, Mark Cuban, a billionaire investor and the owner of the Dallas Mavericks, fell victim to a wallet hack. On-chain analyst WazzCrypto reported a large transfer from Cuban’s wallet, which had lain dormant for nearly 160 days, raising suspicions of a breach. The billionaire soon moved the remaining assets but still lost about $870,000 from the exploit.

Mark Cuban confirmed the crypto theft and attributed it to downloading a malicious version of MetaMask. During his use of MetaMask, the app crashed multiple times, prompting him to take action and transfer the remaining cryptos and NFTs, which prevented further losses.

In a decentralized environment, only those holding private keys have full ownership and control over cryptos, and wallets are tools that help us manage our assets. This approach protects users from potentially malicious platforms, but it also tasks them with asset security. When using a wallet, therefore, we must attend to certain details to better safeguard our assets.

Back up Private Keys and Mnemonic Phrases

Unlike centralized platforms, where passwords can be recovered via email/mobile phone/ID verification, decentralized wallets do not store private keys and mnemonic phrases on their servers. In other words, no one can access or record your “passwords”. Hence, users must back up their private keys and mnemonic phrases themselves to prevent both loss and theft.

For example, you can transcribe your private key and mnemonic phrases onto paper copies and store them in multiple safe spots that you won’t forget; or, you can also encrypt the private key and have it stored on a secure USB drive, but you will have to keep this process offline and securely manage the USB drive.

Ideally, the backup process should be kept offline; otherwise, hackers would be able to easily drain your wallet by attacking your PC or mailbox. Also, do not store your keys and mnemonics on messaging or cloud tools, as data stored there can be accessed via servers at any moment.

Access Authentic Official Websites and Apps

Incidents like what happened to Mark Cuban are not uncommon. Users frequently suffer hacks from downloading an incorrect version of a wallet. Phishing websites often show up in Google searches in the form of advertisements that rank high on the search engine. Clicking on phishing links, whether for wallet downloads or project interactions, poses a significant risk.

Wallets downloaded from phishing links can steal your assets through the private key you imported, while fake project websites can acquire transfer authorizations during your interactions, allowing them to drain your wallet through smart contracts.

This is why we always have to check a website’s URL before clicking on it, and preferably, verify the official website of the project and wallet on platforms like Twitter or Telegram to avoid unnecessary asset losses. Additionally, do not click on links from unknown emails, as they may compromise the information on your computer.

Enhance Security Awareness

While using a wallet, users can enhance their security awareness by recognizing common scams and authorization risks. ViaWallet, for example, offers multiple security features, including phishing address risk marking, high-risk address identification, and contract authorization detection & cancellation.

Furthermore, you can find regular updates about security know-how in ViaWallet Blog to stay informed and adopt more effective protection measures, minimizing the risk of asset loss.

In a nutshell, when using DApps like a decentralized wallet, always keep these principles in mind: 1) never share your private key with anyone, and do not enter your private key in any insecure environment; 2) stay cautious about authorizing large transfers. Remember, protecting private keys and limiting authorizations are the best ways to secure your assets in a decentralized environment.

Follow ViaWallet for the latest news:

Website: https://viawallet.com/

Twitter: https://twitter.com/ViaWallet

Medium: https://medium.com/@ViaWallet

Blog: https://viawallet.com/blog

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As Web3 rapidly expands, however, its proponents face one formidable challenge: Does the high entry barrier of Web3 prevent its mass adoption? On this matter, opinions diverge. Some elitists argue that Web3’s association with crypto means that finance is an inherent aspect of this space, and like traditional finance, Web3 will evolve into a high-barrier industry with an impressive ARPU.

Of course, there are many different voices on the other side of this argument. For instance, early Web3 believers like the ViaWallet team are committed to offering ease of use. They make the case that blockchain technology and crypto assets should help more people access financial services, allowing more users to easily join the world of Web3.

Is Web3 Inherently Inaccessible?

Wallets are a key gateway to Web3. That being said, users also agree that today’s wallets are far from perfect. Custodial wallets are convenient but not entirely secure, while decentralized wallets, although secure, can be challenging for beginners, as they often struggle with new concepts like mnemonic phrases and private keys. This is why many believe that the high entry barrier of wallets, to some extent, impedes the mass adoption of Web3 applications.

For blockchain veterans like ViaWallet, this high barrier clearly contradicts the core Web3 principles of decentralization, transparency, and equal access for all. Excluding users with barriers, therefore, should never be the endgame for Web3. To address this issue, the ViaWallet team hopes to offer a secure, easy-to-use wallet, one that helps more users experience and understand Web3. In May 2019, they released ViaWallet, a decentralized wallet for managing cryptos across multiple chains.

As part of the ViaBTC ecosystem, ViaWallet is backed by a core team comprising experts from world-class players in the Internet and finance industries, with extensive crypto expertise and strong technological capacity. The wallet is protected by an independent security team, providing users with security guarantees. During the past four years of steady operation, ViaBTC has offered secure, reliable crypto management services to 100,000+ users across 100+ countries and regions.

ViaWallet’s Commitment to Ease of Use

ViaWallet’s commitment to ease of use encompasses simplicity, security, seamlessness, and ecosystem prosperity.

ViaWallet is designed to enable easy operations. With its detailed beginner’s guide, even crypto newbies can create a wallet by following the step-by-step instructions. Once they are in the wallet, users will also find the Help Center and Blog, which offer straightforward, intuitive content to equip them with Web3 know-how for more advanced usage.

Furthermore, ViaWallet simplifies its essential operations and procedures to provide a seamless product experience. From crypto transfers to the built-in swap feature, users can complete the target operation right away, without having to spend much time navigating the app.

At ViaWallet, security is another key focus. To begin with, the team conducts comprehensive code audits during product development. Its independent security team reviews the coding to effectively prevent potential exploits and security vulnerabilities at the product level. Additionally, as the decentralized wallet requires users to safeguard their own private keys, ViaWallet provides security warnings, including multiple security features like phishing address risk marking, high-risk address identification, and contract authorization detection & cancellation. Plus, ViaWallet Blog features a special column for security tips to familiarize users with common scams, raise their security awareness, and help them avoid operating mistakes.

Ecosystem prosperity is a key advantage of ViaWallet. The team has always aimed to create a wallet that manages all assets across different chains, enabling users to access the Web3 world with a single wallet. Moreover, leveraging the advantages of the ViaBTC ecosystem, ViaWallet works closely with top mining pool ViaBTC Pool and globally renowned trading platform CoinEx to offer one-stop crypto management services, along with improved efficiency and greater convenience.

Although custodial wallets fit Web2 habits, users have to bear the risk of custody. ViaWallet is convinced that building easy-to-use decentralized wallets is the first step toward Web3 mass adoption. Moving ahead, ViaWallet will continue to offer easy-to-use, secure, and seamless products while building a prosperous ecosystem. The team will deliver a more user-friendly decentralized wallet for managing cryptos, helping more global users join Web3 with lower barriers.

Follow ViaWallet for the latest news:

Website: https://viawallet.com/

Twitter: https://twitter.com/ViaWallet

Medium: https://medium.com/@ViaWallet

Blog: https://viawallet.com/blog

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In our previous article, SocialFi: All-New Social Networking in Web3, we discussed the emergence of SocialFi and the problems it aims to address. As Friend.Tech, a social application, has gone viral recently, SocialFi and Web3 social networking have once again captured the spotlight.

The Rise of Friend.Tech

Friend.Tech, launched on August 10, is a SocialFi app built on BASE. Users can link their X (formerly Twitter) account to Friend.Tech to access their Web2 social identity. Social identity and networks are frequently regarded as key assets. With algorithmic pricing, Friend.Tech has turned this concept into reality, as it strives to help users monetize their social identity.

In Friend.Tech, you can discover other users, as well as who’s popular at the moment. To start a conversation with someone, you’ll need to purchase his or her key. The price of keys, which fluctuates based on supply and demand, is calculated with the formula: price in ETH = supply^2/16,000. In other words, a key becomes more valuable when more people are buying it. The rising price also indicates the user’s popularity on social media, which is genuinely reflected in the price of his or her key.

Friend.Tech has implemented an elegant economic design that facilitates quick reputation monetization, turning social relationships into decent investment targets. Plus, when a user’s key is traded by other holders, he will get 5% of the transaction fee. This incentive structure motivates both key holders and users to drive up the value of the key.

Many investors and users are now confident in the prospect of keys from top KOLs, as they try to profit from speculation. As a result, Friend.Tech has seen a surge in trading volume within a short period. As of September 13, the app has accumulated over 4.3 million transactions, generating a total protocol fee of $7.6 million and nearly 100,000 ETH in total inflows. This makes it one of the hottest apps in the crypto space over the recent weeks.

Challenges Facing Friend.Tech

Beneath the hype, however, Friend.Tech faces a number of challenges. After the initial frenzy, users started to dive deeper into the investment value and use cases of the app, which led to a plunge in its trading volume.

To start with, Friend.Tech remains an invitation-only app. This entry barrier means that most of its users are from the crypto community. Second, the app offers limited functions, and users are mostly excited by the financial prospect of its SocialFi mechanism. In contrast, its social attributes are somewhat weak, and there is still room for improvement in terms of KOL operations. Apart from that, not so long ago, Friend.Tech also faced criticisms about data privacy and security. Facing pressure in multiple respects, the app quickly encountered a bottleneck and has had to grapple with a common challenge for blockchain apps: long-term survival.

Following the decline in trading volume, the Friend.Tech team announced a point campaign, stating that points will come with special use cases in the future. Many users believe that the campaign hints at airdrop rewards, which has recently led to a substantial rebound in trading volume.

The Future of SocialFi

Over recent years, the crypto industry has seen plenty of social graphs, including iconic projects like CyberConnect and Lens. Specifically, CyberConnect boasts over 500,000 accounts, while Lens has built a user base of over 360,000, with over a hundred projects built on its ecosystem. That said, both lack social incentives, and many of their users stay active chiefly for potential airdrops.

Despite the recent criticisms facing Friend.Tech, especially its obsession with finance, the project remains a bold innovation in the SocialFi category. A well-designed monetization mechanism can help social projects, particularly projects lacking social incentives, get through the initial hurdles and achieve stable growth over the long term.

In the case of Friend.Tech, the well-designed key mechanism helps KOLs effectively monetize their knowledge. Besides, the price curve of keys is more consistent with the market demand. With the dynamic pricing of keys, knowledge payment is no longer a one-shot deal, which is the case in the conventional subscription model. Instead, KOLs have to keep upgrading their content in order to attract more holders, which allows them to earn more by driving up the price and trading volume of keys. Key holders can also make profits by inviting more friends or acquaintances to purchase keys.

From the lightweight product model depending on Web2 social networking (i.e., Twitter) to the key economics built on algorithmic pricing and a new avenue for knowledge monetization, Friend.Tech has opened up new paths of development for Web3 social networking. There are many scenarios where social networking and knowledge can be monetized. For instance, every year, plenty of people bid for the chance to dine with Warren Buffett, hoping to learn from the Oracle of Omaha. On the Internet, however, such pay-for-advice or pay-for-knowledge models are still rare. Perhaps more SocialFi projects will build upon Friend.Tech’s legacy and refine the algorithms to strike a perfect balance between social networking and finance and foster a more sustainable model of knowledge monetization.

ViaWallet now supports multiple public chains and Layer2 applications, including Ethereum, BASE, Optimism, Arbitrum, Polygon, and more. Download ViaWallet now to try out more Web3 apps: https://viawallet.com/download

*The article is for reference only and offers no financial advice.

Follow ViaWallet for the latest news:

Website: https://viawallet.com/

Twitter: https://twitter.com/ViaWallet

Medium: https://medium.com/@ViaWallet

Blog: https://viawallet.com/blog

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BASE is a Layer2 network incubated by Coinbase and built on OP Stack, which is a standardized open-source module launched by Optimism, as previously introduced in OP (Optimism): Building a Multi-chain Layer2 Ecosystem. Today, we will dive deeper into BASE, an iconic OP Stack-based project.

Origin of BASE

BASE is incubated by Coinbase, a top crypto exchange. In its initial road map, the exchange outlined four stages of development:

1. A protocol reaching millions of users (Bitcoin, Ethereum, etc.)

2. An infrastructure serving tens of millions of users (exchange & secure storage)

3. An interface for hundreds of millions of consumers (user-controlled wallet)

4. Decentralized applications (DApps) for billions of users (Financial 2.0)

Coinbase has progressed through the first three stages with its Web2 products. However, the fourth goal, DApps, can only be achieved on the chain. This prompted Coinbase to consider building its own Layer1 blockchain, but this option was ultimately abandoned due to various obstacles.

Coinbase believes that Layer1 is suitable for high-value DApps requiring maximum security, such as large organizations valued in the billions. In this respect, Ethereum is already the most sophisticated, securest, and the most decentralized Layer1 network. That said, the enhanced security also comes with expensive fees, rendering DApps less accessible. This makes it difficult for DApps to scale on Ethereum. As such, Coinbase chose the Layer2 path, which is better suited for large-scale applications. That’s how BASE was born.

Cooperation Between BASE and Optimism

BASE’s technical architecture is entirely based on OP Stack, employing the Optimistic Rollup solution. Optimistic Rollup and its fraud proofs have been extensively illustrated in our previous article on Optimism. BASE’s workflow is basically the same as that of Optimistic Rollup. Like Optimism, BASE inherits Ethereum’s security while achieving low transaction fees and high TPS. Furthermore, BASE works closely with OP Labs to enhance the security of both BASE and Optimism.

BASE’s collaboration with Optimism goes beyond that. They also work with Optimism Collective to drive the development of the Superchain. Proposed by Optimism Collective, the Superchain is a Layer2 network that shares security, communication layers, and open-source technology stacks across multiple chains based on OP Stack that are all standardized. This enables developers to build apps for the entire Superchain ecosystem, rather than a single chain.

In order to build an open, neutral, and decentralized platform, Coinbase, as the incubator of Base, claims that it will follow the BASE neutrality principles and preserve the freedom of developers and users. Currently, Base can only be upgraded via a 2-2 multisig structure jointly controlled by the Optimism Foundation and Base.

Additionally, Base and Optimism are closely tied together in terms of revenue. Base is required to contribute a certain percentage of its sequencer revenue to Optimism Collective. In return, Base will receive 2.75% of the total OP supply over the next six years. This approach grants BASE the governance rights of Optimism and provides Optimism with additional sources of income.

Future of BASE

Optimism’s vision for the Superchain is to build an open, global and on-chain economy via decentralization. BASE clearly plays a crucial role in furthering this vision. Whether as an iconic OP Stack project or a co-contributor to OP Stack, BASE has impressed more developers with the potential and future possibilities of the Superchain.

According to its positioning, BASE is not just another Layer2 network. As envisioned by the BASE team, BASE is a bridge that aims to familiarize existing Web2 users with the crypto world through premier, user-friendly on-chain experiences. This bridge connects users to Ethereum Layer1, as well as other Layer2 networks and Layer1 ecosystems, paving the way for billions of users to access Web3.

Although BASE has yet to introduce groundbreaking tech innovations, its association with a top-tier exchange has easily attracted countless developers and users, which is evident from the high user activity recorded in just a month and the launch of the many new projects. That being said, we will have to wait for truly large-scale applications from BASE to see if the network can bring billions of users onchain as expected.

You can go to ViaWallet to manage BASE-based assets. Click https://viawallet.com/download to download the ViaWallet and try it out.

For more information, please refer to:

BASE’s official website: https://base.org/

BASE documentation: https://docs.base.org/

Manage BASE-based asset: https://viawallet.com/download

Follow ViaWallet for the latest news:

Website: https://viawallet.com/

Twitter: https://twitter.com/ViaWallet

Medium: https://medium.com/@ViaWallet

Blog: https://viawallet.com/blog

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We introduced Arbitrum in our previous article ARB (Arbitrum): A Layer 2 Leader, and today, we will delve into the background, technology, and current status of another iconic Optimistic Rollup — Optimism.

Optimism’s Background

To resolve the scalability challenge of Ethereum, Ethereum founder Vitalik Buterin and Lightning Network founder Joseph Poon published a paper titled Plasma: Scalable Autonomous Smart Contracts in 2017, proposing the Plasma architecture, which is a non-custodial sidechain solution. Inspired by the new architecture, several Ethereum developers established a non-profit research group called the Plasma Group, which includes Ethereum Foundation researcher Karl Floersch and crypto OG Jinglan Wang, to work on scaling solutions.

While working on this new structure, the researchers noticed that Plasma is subject to some fatal problems. The Plasma Group mentioned that due to the long assets transfer time between L2 and L1, many smart contracts could not run on Plasma. In 2019, the Ethereum community started discussing another scaling solution — Rollup. The Plasma Group combined the Optimistic mode, which was originally designed for Plasma, with Rollup, giving birth to Optimistic Rollup.

Subsequently, Karl and his friend, Uniswap founder Hayden Adams, worked together and released a decentralized trading application called Unipig based on Optimistic Rollup at the Ethereum Devcon. With this demo application, Plasma Group received investment from Paradigm, a top crypto VC, in early 2020 and evolved from a non-profit research organization into a for-profit enterprise named Optimism, focusing on the research of Optimistic Rollup solutions.

The Optimism team maintained close ties with Vitalik, Uniswap, Gitcoin, Consensys, and the Ethereum Foundation back in the Plasma Group period. This is why many core Ethereum developers have been involved in the exploration of Optimistic Rollup. Following the mainnet launch of Optimism, top DeFi applications including Uniswap, Compound, and Synthetix also stated their support.

Optimism’s Tech Solutions

As a fast, stable, and scalable L2 network, Optimism combines the Ethereum Virtual Machine (EVM) with the Optimistic Rollup solution, and its EVM-equivalent architecture allows developers to easily migrate their applications to Optimism.

Optimism's transactions consist of two parts:

• Cross-chain transactions between L1 and L2;

• Transactions between two addresses on L2.

As shown in the figure below, through the cross-chain bridge contract, users can easily transfer assets between L1 and L2.

1. The user sends 10 ETH to the cross-chain bridge contract on L1;

2. The contract locks the 10 ETH, and then adds the transaction to the sequencer queue;

3. The sequencer reads the transaction and passes it to the cross-chain bridge contract on L2;

4. The L2 contract deposits the 10 ETH into the user’s L2 address.

Transferring assets from L2 to L1 is somewhat different. The cross-chain bridge contract on L2 sends transaction information to the L2ToL1MessagePasser smart contract, which records the data to be sent from L2 to L1. The relay node then reads the data and, after the fraud-proof challenge period (7 days), sends the information to L1, where the data is processed by the cross-chain bridge contract.

The following L2 transaction workflow is the main working process of Rollup:

1. The user submits a transaction;

2. The sequencer adds valid transactions to L2;

3. The sequencer packages the data of transactions added to L2, along with the latest state root, and sends and stores it on the L1 smart contract for synchronization;

4. After synchronization, validators include the transactions into L2 replicas.

Fraud proofs represent a critical way for Optimism to keep sequencers honest. If a sequencer publishes a fraudulent state root on L1 (e.g., Alice’s balance decreased by 1 ETH and Bob’s balance increased by 1 ETH, without Alice making any transactions), then anyone could initiate a fraud proof during the challenge period by executing the corresponding L2 transaction on L1.

If the resulting state root of a fraud proof (Alice’s balance remains unchanged) differs from the state root submitted by the sequencer (Alice’s balance changes), the state root would be deemed invalid and recalculated. In this case, the sequencer’s deposit would be taken away, making sure that all L2 transactions submitted to L1 are honest.

Although anyone can initiate a fraud proof, the job is now primarily performed by validators.

The Future of Optimism: Superchain

Right now, Arbitrum dominates the L2 category, while Optimism steadily holds second place, with a market share of 19.69%.

Although Optimism is no match to Arbitrum in terms of market share, the network remains optimistic and has blazed a new trail. Last year, Optimism became the first L2 project to issue a native token and proposed an innovative decentralized governance model called Optimism Collective. Soon after, Optimism Collective released a standardized open-source module called OP Stack, which helps developers easily build L2 on Ethereum, just like building L1 with Cosmos.

This February, crypto exchange Coinbase announced a partnership with Optimism and launched BASE, an L2 network based on OP Stack. On the same day, Optimism Collective announced the Superchain project, which aims to bring together multiple isolated L2 chains into an interoperable, composable system, creating a unified chain network.

The Superchain now includes Optimism’s mainnet, the BASE network, and other L2s that may join the project in the future. Optimism’s long-term goal is to turn the Superchain into a sprawling network that maximizes interoperability and shares decentralized protocols, thereby building a multi-chain L2 ecosystem.

Users can now manage their OP in ViaWallet. Download the app and try it out: https://viawallet.com/download

[More Information]

Optimism website：https://www.optimism.io/

Market cap ranking：https://coinmarketcap.com/currencies/optimism-ethereum/

Optimism Docs：https://community.optimism.io/

Buy OP: https://www.coinex.com/exchange/OP-USDT

Manage OP：https://viawallet.com/download

Follow ViaWallet for the latest news:

Website: https://viawallet.com/ Twitter: https://twitter.com/ViaWallet Medium: https://medium.com/@ViaWallet Blog: https://viawallet.com/blog Mirror: https://mirror.xyz/0x3C8D834f1B8C066796EA63Fa0F9DC72378bfCc22

As the largest Layer2 network, Arbitrum has attracted plenty of users and developers. Today, we will offer a full introduction to Arbitrum. Let’s find out what Arbitrum is, how its technologies work, and its today and future.

Arbitrum’s Team and Origin

Arbitrum is a Layer2 scaling solution based on Ethereum that aims to provide users with a faster blockchain network at a lower cost while maintaining the same security performance as Ethereum.

Arbitrum is backed by Offchain Labs, a strong founding team established by computer science professor Ed Felten from Princeton University and his two Ph.D. students, Steven Goldfeder and Harry Kalodner. Back in 2015, Ed Felten was appointed as Deputy U.S. Chief Technology Officer by the White House. Upon his return to Princeton University in 2018, his two Ph.D. students invited him to work on Arbitrum.

Shortly after Ed Felten accepted the invitation, Harry Kalodner published a paper titled Arbitrum: Scalable, Private Smart Contracts, which he completed together with Ed Felten and Steven Goldfeder. The paper explored how Arbitrum could scale Ethereum without compromising its security, which marks the official launch of Arbitrum.

Arbirum’s Technologies

Arbitrum uses Optimistic Rollup. Specifically, a Rollup is an on-chain scaling solution that duplicates and transfers information on Ethereum to Layer2 for computation and storage. The processed information is then compressed and uploaded back to Ethereum. This approach allows Layer2 to handle the complex computation process and Layer1 to hold onto the critical data, which significantly improves Layer1’s performance while maintaining the same level of security.

When processing transactions, Layer2 is charged with the task of preventing bad actors from submitting false information and stealing assets. Optimistic Rollup uses fraud proofs, meaning that validators on Layer2 need to lock up a deposit (ETH) to provide a signature, guaranteeing that “the network state will change from A to B after the transactions occur on Layer2.” Ethereum “confidently” assumes that all states submitted by Arbitrum are compliant, with an “innocent until proven guilty” attitude.

If Bob claims that Alice's money is his, then anyone, i.e. a challenger, could initiate a challenge and submit evidence during the challenge period (7 days for Arbitrum), stating that "the result guaranteed by the validator differs from the executed result." If the disputable assertion is confirmed, the disputed action will be invalidated, and the challenger will receive the deposit locked up by the dishonest validator.

Arbitrum’s Rollup mechanism makes sure that the network smoothly progresses as long as there is one honest participant, as illustrated in the diagram below. If Alice is honest, there will be no disputable assertions, and the green box will be confirmed. Therefore, the Arbitrum team claims that this Rollup solution is trustless; bad actors cannot produce incorrect results, and they can only delay the network’s normal progress, but this requires expensive costs as deposits are required.

Arbitrum Nova vs Arbitrum Nitro

Arbitrum currently offers two blockchains, Arbitrum Nova and Arbitrum Nitro, which come with different technologies and use cases.

Arbitrum Nova is based on AnyTrust technology, which is the minimal trust assumption guaranteed by the Data Availability Committee (DAC). On Arbitrum Nova, data is updated through DACerts, which are signed by the DAC. Security could be compromised if 19 out of 20 committee members are malicious, but if two or more members are honest, the data will run correctly. In most cases, at least 19 committee members behave honestly.

With this approach, Arbitrum Nova eliminates the seven-day withdrawal period (challenge period) from Layer2 to Layer1 and reduces network transaction fees for users. As such, the chain is mainly used for high-frequency and cost-sensitive general applications, such as gaming and social networking.

Arbitrum Nitro, an upgrade from Arbitrum One, still uses Optimistic Rollup. Unlike Arbitrum Nova, Arbitrum Nitro publishes complete data sets as Calldata on mainnet Ethereum. Therefore, it focuses more on DeFi and NFT applications.

Arbitrum’s Today and Future

Arbitrum has always been a leader in the Layer2 space since its launch in 2021. According to L2BEAT, Arbitrum One (i.e., Arbitrum Nitro) currently holds 66.75% of the Layer2 market share, far ahead of Optimism, which ranks second. In addition, the recently launched Arbitrum Nova holds 0.21% of the market share.

Arbitrum Nova vs Arbitrum NitroSource: L2BEAT (as of May 6)Arbitrum stands as a worthy opponent to its public chain rivals. Ranking fourth by TVL, the project has captured a 5.02% share of the whole crypto market, higher than big-name public chains such as Polygon, Avalanche, and Fantom.

Arbitrum’s ecosystem is flourishing, with popular DeFi applications such as Uniswap and AAVE, as well as trending projects like decentralized derivatives platform GMX and decentralized gaming platform Treasure DAO, which have become iconic Arbitrum applications.

Recently, Arbitrum launched its native token ARB, a major step towards decentralized community governance. ARB holders can submit and vote on community proposals to jointly build Arbitrum’s future. Moreover, Arbitrum also released Arbitrum Orbit, a Layer3 developer toolkit that allows developers to build Layer3 on Arbitrum.

Users can now manage their ARB in ViaWallet. Download the app and try it out: https://viawallet.com/download

[More Information]

Arbitrum website：https://arbitrum.io/

Market cap ranking：https://coinmarketcap.com/currencies/arbitrum/

Arbitrum whitepaper：https://github.com/OffchainLabs/nitro/blob/master/docs/Nitro-whitepaper.pdf

Buy ARB: https://www.coinex.com/exchange/ARB-USDT

Manage ARB：https://viawallet.com/download

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The necessity of liquidity staking

In the article Consensus - The Law of the Blockchain World, we detailed the consensus mechanisms of public chains. Currently, the industry’s consensus mechanisms are still mainly based on PoW and PoS as well as their variants.

The PoW mechanism requires a large number of miners to package data and collectively maintain the network. To improve efficiency and allow miners with small computing power to earn stable income, mining pools like ViaBTC have emerged. They combine the computing power of miners and mining farms scattered around the world to ensure stable income for each contributing miner.

Similar to miners, the PoS mechanism also functions as validators. Validators need to lock up their tokens to maintain network nodes. The tokens locked, though beneficial to network security, cannot be circulated. If the DeFi yield earned by liquidity providers (LP) is higher than the staking yield on the Beacon Chain, some users, driven by profits, may abandon staking for liquidity mining.

To improve the capital utilization efficiency of validators, the industry has proposed a solution called liquidity staking, which allows users to unlock the liquidity of the staked tokens and invest the tokens in collateral lending, trading, or other derivative services.

The liquidity staking mechanism

There are many liquidity staking protocols on the market, the best-known of which is Lido. Lido is currently the largest Ethereum liquidity staking protocol, with a market share of 74%. Here, we will use Lido as a typical example to explain what liquidity staking is.

Users can use Lido to stake ETH on the Beacon Chain. After staking, Lido will mint stETH tokens as the staking certificate for the staker in a 1:1 ratio. The stETH balance will also reflect the staking rewards that users have earned. As staking ETH generates rewards, the balance of ETH held by the staker on the Beacon Chain will also increase. Lido updates the stETH balance for users every day based on the staking rewards. The staker's stETH balance equals the initial staking amount plus staking rewards minus penalty fees.

stETH can be used and traded like ETH, including trading on DEXs such as Curve and Balancer, or being used as collateral for borrowing and lending on protocols such as AAVE and MakerDAO. This allows stakers to unlock the liquidity of the tokens they staked and obtain revenue beyond staking rewards from other protocols.

In addition to Lido's stETH, there are other Ethereum liquidity staking tokens (LSTs) on the market, such as Coinbase's cbETH, Rocket Pool's rETH, Frax Finance's frxETH, and Ankr's aETH. Furthermore, many liquidity staking protocols also support other PoS public chains. For example, Lido provides stMATIC and stKSM, while StaFi provides rATOM, rBNB, rDOT, and rSOL. With the completion of the Shapella upgrade, the Beacon Chain has allowed ETH withdrawals, which means that LSTs such as stETH can be withdrawn and exchanged for ETH.

How to engage in liquidity staking?

At present, ViaWallet supports many liquidity staking protocols, including Rocket Pool and Stkr. Users can also enter the website of different liquidity staking protocols on ViaWallet for staking.

Here is an example:

1. In the DApp section of ViaWallet, find the protocol labeled Eth2, which represents liquidity staking protocols. Alternatively, you may enter the website of the liquidity staking protocol you want to use and access the website.

2. After entering the protocol, select the asset you want to stake, such as ETH, MATIC, etc., and tap "Stake now."

3. In the staking page, enter the amount of ETH or other tokens you want to stake, tap "Submit", and confirm the transaction in your wallet.

After the above steps, you’ve successfully completed a liquidity staking transaction and will receive the corresponding amount of stETH or other LSTs. You can now enjoy the benefits of staking ETH while using the LSTs for other purposes on different protocols.

ViaWallet now supports multiple public chains' liquidity staking protocols and applications, providing limitless access to the Web3 world for all users. If you are interested, please join us at: https://viawallet.com/.

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In the Web2 era, social networking is one of the greatest demands of Internet users. According to Statista, as of January 2023, a total of 5.16 billion people around the world are using the Internet, 4.76 billion of whom are active social media users. These figures tell us that social networking has become an essential component of the Internet.

Flaws of Web2 Social Media Applications

Common social media apps include instant messaging services with strong interpersonal ties, as well as forums, social media networks, and blogs with weak ties. The former category includes apps such as Telegram, Skype, Whatsapp, LINE, and WeChat; whereas, weak-tie social media apps feature a wider range of use cases, covering communities like Reddit, social media networks like Twitter, and blogs like Medium.

As you spend more time on social networking platforms, you will find that the ads pushed to you are becoming more accurate. Maybe you just tweet a craving for burgers, and soon after, you will see a burger joint ad. All these issues stem from the profit mechanism of Web2 social networking platforms, which can obtain users’ personal data and exploit the data to earn revenue via demand-specific advertising and marketing.

Aside from that, on social media platforms like Twitter, users are the ones who are constantly creating content and value, but the advertising revenue recorded by such platforms is not reasonably shared with creators. Monopolistic social networking platforms control all the data and pricing decisions. As people become more aware of privacy protection and creator value, new business models are urgently needed to replace traditional social networking applications. As a result, SocialFi, an entirely new way for us to socialize, has come into being in Web3.

The SocialFi Solution

As its name implies, SocialFi is the combination of Social and Finance, which can be seen as a form of socialization built with the help of blockchain technology and tokenomics. In GameFi, users make earnings by playing games, i.e., Play-to-Earn, and there’s also a similar mechanism in SocialFi: users can create value and earn token rewards by simply socializing with others.

To guarantee data security and privacy, SocialFi apps commonly use blockchain technology, including decentralized storage and on-chain behavior records. Compared with Web2 social platforms that store data in centralized servers, SocialFi apps allow users to genuinely own their data. 

In terms of content review, traditional social platforms occasionally delete or block user-created content due to external factors. For instance, Twitter has banned many accounts. For SocialFi apps, it is more difficult for organizations to exercise centralized control because blockchain is inherently immutable. From the perspective of openness and freedom, SocialFi apps are obviously superior.

As for creator earnings, SocialFi apps have a great advantage over Web2 apps, as a healthy economic model can encourage users to create better content. With SocialFi apps, users can create high-value content and build social influence, which are both major sources of user traffic, to earn more token rewards. In contrast, traditional social platforms often rely on ads and user data to generate revenue, which is not shared with creators. In SocialFi apps, users can make more earnings by creating high-quality content and engaging in social interactions. Furthermore, motivated by token rewards, SocialFi app users are more incentivized to create better content. Such an economic model encourages users to invest more time and effort in content creation, thereby empowering the development of social apps in the long run. 

On the Internet, social apps are undoubtedly crucial, no wonder plenty of institutional investors and developers are confident in this category. Meanwhile, many iconic projects have emerged. For example, Damus, a social media platform backed by Twitter co-founder and former CEO Jack Dorsey, has been built on top of the Nostr protocol. New platforms also include Lens Protocol, a social graph system built by the Aave team on Polygon, Mirror, a blog launched on Arweave by a former a16z partner, and Mask Network, a Web3 plugin built on Twitter. 

ViaWallet supports Web3 apps on multiple public chains, allowing users to freely experience the world of Web3. If you are interested, welcome to join ViaWallet now at https://viawallet.com/.

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 The popularity of Blur indicates that while there is a huge demand for NFTs, the market and its derivative tools remain underdeveloped. Data from NFTGO shows that the market cap of three top projects, specifically BAYC, CryptoPunks, and Otherside, is nearly 2 million ETH, which is worth over $3.4 billion according to the real-time ETH price on CoinEx.

That being said, the unique characteristics of NFTs make it difficult for us to accurately capture the value of each NFT. Like traditional collectibles, different NFTs come with varying features, and the attribute preferred by collectors may offer an NFT a different price tag. The lack of clear valuation methods makes NFT trading more challenging than FT trading, which also blocks the market circulation of NFTs and results in poor liquidity.

Moreover, blue-chip NFTs are often expensive and inaccessible to retail investors, hindering the development of the NFT market. Although the No.1 crypto Bitcoin is quoted at $20,000, retail investors get to purchase 0.01 or even a smaller amount on exchanges. However, the floor price of Bored Ape Yacht Club (BAYC) stands at 67 ETH, which is worth over $100,000, making it unaffordable to ordinary investors.

The NFT market has continued to explore new ways to address those problems, which triggered the appearance of the NFTFi category, spanning NFT marketplaces and aggregators, lending, renting, derivatives, fragmentation, and oracles.

NFT marketplace and aggregator

NFT marketplaces are considered the core of the entire NFT ecosystem. With an NFT marketplace, users can list their NFTs or purchase NFTs from others at any time. Moreover, most NFT trading platforms offer multiple sales models, including fixed-price sales, Dutch auctions, English auctions, and private transactions. Right now, trending NFT marketplaces include OpenSea, Rarible, LooksRare, and X2Y2.

Aside from centralized marketplaces, some decentralized projects are working to solve NFT’s poor liquidity. For instance, Sudoswap introduced the AMM mechanism of DEXs into the NFT market. This allows users to provide liquidity and benefit from instant pricing through trade matching on Sudoswap, which addresses the liquidity problem in the decentralized NFT market. However, this method is more suited for NFT projects ranking in the middle or bottom of the market because the AMM mechanism eliminates rarity differences. Meanwhile, AMM is not applicable to blue-chip NFT projects, as they are subject to greater price differences.

In the NFT market, if a seller listed an NFT on OpenSea, users who only use LooksRare will not be able to see that NFT. As a result, when buyers are searching for their favorite NFT, they may have to switch between multiple NFT markets, which significantly drives up the time cost.

This has led to the rise of aggregators, which have become a major channel for buying NFTs. For example, in addition to its own marketplace, Blur also aggregates OpenSea, LooksRare, and X2Y2, allowing traders to quickly comb through the essential statistics of the relevant NFTs on just one platform. For professional traders, aggregators like Blur are much more efficient than regular marketplaces like OpenSea.

Many top projects are trying to deploy their own aggregator. Uniswap, a well-known DEX, recently acquired Genie and launched its own NFT aggregator, which supports popular NFT marketplaces such as OpenSea, X2Y2, LooksRare, Sudoswap, Larva Labs, Foundation, NFT20, and NFTX. OpenSea has also acquired NFT marketplace aggregator Gem, aggregating platforms that include OpenSea, Rarible, LooksRare, X2Y2, NFTX, and NFT20.

NFT lending

NFT lending has emerged as an essential part of the NFTFi category. Many NFT holders hope to obtain temporary liquidity without selling their assets, which has led to a growing demand for NFT lending. At the moment, NFT lending mainly includes two models: Peer-to-Peer and Peer-to-Pool.

NFTfi is a typical provider of Peer-to-Peer lending services. This lending model allows borrowers and lenders to negotiate all the lending conditions, including the amount, term, interest rate, and liquidation method. As such, Peer-to-Peer lending features smaller interest rate spreads, and since no external oracles are needed, users are not exposed to oracle risks. That said, Peer-to-Peer lending is subject to high time costs, and borrowers may need to spend a long time finding suitable lenders.

Many NFT lending platforms have leveraged AAVE’s lending model, employing the Peer-to-Pool approach, in which the protocol matches the two sides and makes decisions on behalf of lenders. This approach is more efficient and enables quick matching but lacks capital efficiency and is subject to significant interest rate spreads. For instance, if there is 1,000 ETH in the pool, but the borrower only wants to borrow 500 ETH, the interest he/she paid will be evenly distributed among all lenders, meaning that the lenders would receive a much smaller interest payment. As a result, most of the funds in the pool are not fully utilized. Moreover, under the Peer-to-Pool model, the platform might be run by users. For example, the well-known NFT lending platform BendDAO experienced liquidity crunches due to the liquidation of NFTs during a market downturn.

NFT renting

Last year, Ethereum approved the ERC-4907 smart contract standard, which introduced the concept of “expires” to enable collateral-free NFT renting through contracts. Collateral-free renting allows NFTs to be wrapped in a way that preserves their original features, but the wrapped NFT will be destroyed when the rental period expires. Since the release of ERC-4907, collateral-free renting has become the mainstream approach in the NFT rental market, replacing conventional collateralized renting, and most platforms including reNFT have adopted collateral-free renting. Despite that, NFT renting remains a small market, as the demand for renting blue-chip NFTs is limited, and most application scenarios for NFT renting are in fields including gaming and metaverse land.

NFT derivatives

In the financial sector, derivatives are indispensable products, and NFTFi’s experiments with derivatives have also attracted market attention. Many platforms are working on NFT-based futures and options, despite their lack of popularity. For example, nftperp provides NFT futures, allowing investors to go long or short on NFTs, while NiftyOption offers NFT options. Right now, the NFT derivatives market is still in its infancy, but as the relevant products are upgraded, investors will be able to use hedge against price swings in the NFT market through various strategies.

NFT fragmentation

As NFTs are indivisible, blue-chip NFTs like BAYC and CryptoPunks are extremely expensive, making it a challenge for retail investors to join the game. To address the problem, many projects are exploring NFT fragmentation, i.e., splitting NFTs into multiple fragments that investors can purchase and share the returns. Fractional.art, a leading NFT fragmentation project, offers Uniswap-based trading functions that allow users to trade fragmented NFTs anytime, anywhere. Despite its advantages, NFT fragmentation also faces challenges, such as potential disputes over the distribution of airdrop benefits. 

NFT oracles

Accurately capturing NFT prices has always been one of the biggest challenges in the NFT market because prices affect a wide range of operations, including borrowing and liquidation. In light of that, NFT oracles were launched to solve the problem of NFT valuation. For instance, Abacus oracle uses a peer incentive pricing mechanism and the Abacus Spot liquidity valuation to provide NFT pricing services, which accurately capture the value of an NFT. Other platforms like Upshot and Banksea are also exploring their own pricing mechanisms. With a focus on accurate real-time NFT pricing, oracle projects are competing fiercely in the sector.

Conclusion

NFTFi is an essential part of the NFT market, and NFT segments are striving for a shared goal: achieving the large-scale circulation of NFTs and making them more accessible. At the moment, many NFTFi projects are still in a nascent stage and may present impressive innovations that will lead to the exponential growth of the NFT market. For instance, Blur’s third airdrop triggered a rapid increase in the transaction volume and floor price of blue-chip NFTs such as BAYC and Azuki. By the same token, the advancement of NFT infrastructure will also attract more users to the market. 

ViaWallet now enabled the transfer, receipt, and check of NFTs on public chains including Ethereum, BSC, CSC, Polygon, and supports the use of NFTFi applications on multiple public chains. Download ViaWallet : https://viawallet.com/

Disclaimer: This article is for reference only and offers no financial advice.

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We can explain zero-knowledge proof with a classic example: If Alice wants to prove to Bob that she owns the key to a warehouse, a common approach would be for Alice to give the key to Bob, who then opens the warehouse, proving that Alice does hold the key.

However, this approach discloses Alice’s key to Bob. With zero-knowledge proof, Bob can ask Alice to retrieve a specific item from the warehouse, which is chosen at random and unknown to Alice, eliminating the possibility of cheating. Moreover, as the warehouse can only be opened with the key, Alice could open the warehouse and retrieve the item to prove that she does possess the key while avoiding disclosing it.

zk-SNARKs: The mainstream solution to private transactions

Blockchain technology advocates openness and transparency but has always been criticized for its lack of privacy. Transaction records of mainstream cryptos such as BTC, ETH, and USDT are all available on blockchain explorers, which means that once your address is known, then anyone can check your on-chain transfers, including the amount and sender/recipient. However, in reality, many do not want their transactions to be publicly available.

As such, over the years, we have witnessed the emergence of many privacy coins based on zero-knowledge proofs, including the famous Zcash, which uses the zk-SNARKs technology to hide transaction information while allowing miners to validate transactions and maintain network security.

In addition to Zcash, privacy crypto mixer Tornado Cash, privacy-preserving public chains Aleo and Iron Fish, and Layer2 privacy-preserving protocol Aztec have all adopted ZKP solutions. 

zk-Rollup: A major Layer 2 scaling solution

As the Layer 2 sector booms, the Rollup solution has attracted wide attention. The Rollup approach allows a chain to transfer transactions to Layer 2 for processing and data compression. Further, with Rollup, a public chain can upload the compressed data to Layer 1 to save part of the data, which not only ensures the chain’s security but also significantly improves its performance. Right now, Rollup solutions mainly include zk-Rollup and Optimistic Rollup, and the biggest difference between them lies in the validation method. In particular, zk-Rollup uses zero-knowledge proofs to validate transactions.

Upon processing off-chain transactions, zk-Rollup generates a zero-knowledge proof and submits it to the contract on the main chain for quick validation. Since the zero-knowledge proof is small and will not become larger as the number of transactions goes up, validation of such proofs is fast, which boosts the chain’s TPS.

Many institutional investors say that zk-Rollup might be the most notable crypto category in 2023, and it has presented us with a number of hit projects, including Polygon zkEVM, zkSync, and StarkNet.

In addition to private transactions and zk-Rollup, recently, many other public chains using zero-knowledge proofs have captured the spotlight. For instance, Mina Protocol, which uses recursive zero-knowledge proofs, is such a chain. Mina effectively compresses block data by leveraging zero-knowledge proof, keeping the block size at about 22 KB. For more details about Mina, please refer to our previous article: MINA (Mina Protocol): The World’s Lightest Blockchain. 

Zero-knowledge proof boasts obvious advantages in enabling private transactions, data compression, and blockchain scaling. Additionally, ZKP technologies including zk-SNARKs and zk-Rollup have scored smooth progress, and ZKP-based public chains have also earned extensive recognition among investors. ViaWallet now supports plenty of cryptos deployed on ZKP-based public chains, including ZEC, MINA, and SYS. Going forward, as more zk-Rollup protocols start to issue coins, ViaWallet will roll out more premium assets to meet user demands.

Download ViaWallet now to try out this amazing app: https://viawallet.com/

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Arbitrage, a term from the financial industry, refers to the practice of taking advantage of a gap in prices in two or more markets. It often occurs in investment markets such as foreign exchange, stock index, and commodity futures. In the crypto space, as crypto exchanges and assets are extremely diverse, arbitrage has also become a common strategy for making crypto investments.

Back in the early days when there were only a few crypto investors, price gaps were common between exchanges. For instance, if spot BTC is sold at $20,000 on Exchange A and $20,100 on Exchange B, investors could buy BTC on Exchange A and sell it on Exchange B, earning profits from the $100 price spread.

Over the years, as the user base of cryptocurrency expands, the price gap between exchanges has narrowed, and cryptos are quoted at virtually the same prices on different exchanges. As crypto arbitrage now requires strong price capture capacity and expensive costs, retail investors could hardly find any arbitrage opportunity, while professional investment institutions are still earning arbitrage profits by leveraging the tiny differences in crypto prices and exchange rates. Despite that, in today’s market, many scammers are trying to hoax retail investors with arbitrage scams.

Arbitrage With High Returns: Fake Cryptos

In recent years, many scammers would invite crypto investors to join “XXX arbitrage groups” on Telegram. In such groups, administrators would send “arbitrage tutorials”, which “helped” members of the group earn handsome profits that are faked by the scammers. For instance, fake HT fraud is a typical type of arbitrage scam, and Huobi even issued an official announcement to notify users of the scam.

Here is how a fake HT fraud would go: The scammer would first ask you to transfer your ETH to a designated address and promise to send you HT worth 115% of the ETH in return. Initially, the scammer would send back real HT to convince you that it is a great arbitrage opportunity with high returns and zero risks. As you transfer more ETH to the address, you’ll notice that the subsequent HT coins being sent back are fake, worthless cryptos named “HT”.

Arbitrage With High Returns: Unable to Withdraw

In addition to fake cryptos, scammers may also bait users with fake exchanges. To be more specific, the scammers would first set up a small crypto exchange to intentionally raise the price of BTC sold on the exchange, attempting users to deposit their BTC to the exchange and sell it for arbitrage profits. For example, when the market price of BTC stands at $20,000, the scammers would promise great arbitrage profits; they’d say that BTC is now quoted at $22,000 on the exchange because users bought huge amounts of BTC on the platform due to a fiat currency crisis.

Tempted by the promise of huge profits, some users would only deposit a small amount of crypto into the exchange and then sell them as soon as possible. Once the coins are sold, convinced that they have found a great arbitrage opportunity with zero risks, the users would become less prudent and start to deposit more cryptos. Soon afterward, users would find that they can no longer make any withdrawals, eventually losing their deposits to the scammers.

Using fake coins or exchanges, scammers bait users with high returns and steal funds from them when users are lured in. Therefore, in the face of high-return investment with unknown risks, we should remain rational to protect our assets. Moreover, investors should also choose well-established exchanges and refer to official SNS information. As they say, there ain’t no such thing as a free lunch.

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Wallets are the most essential infrastructure for protecting crypto assets. Keenly aware of the significance of asset security, in 2022, ViaWallet conducted multi-dimensional upgrades, kept improving its product features, and offered comprehensive, secure, and easy-to-use wallet services. 

Wider-ranging asset management features & one-stop services

Last year, ViaWallet introduced multiple coins and tokens, including AVAX, FTM, KDA, ROSE, MINA, LUNA, LUNC, etc. Cumulatively, the wallet now supports 48 coins and over 1 million tokens, leading the industry in terms of the number of cryptos covered. Going forward, ViaWallet will introduce more cryptos so that users can manage all their crypto assets with just one wallet.

Apart from the basic cryptos, ViaWallet also enabled the transfer, receipt, and check of NFTs on public chains including Ethereum, BSC, CSC, and Polygon last year. It has become compatible with DApp browsers on chains such as Polygon, Avalanche, and Fantom, and its users can enjoy DApps on eight trending chains. Having satisfied users’ basic demands of DApps and asset & NFT management, ViaWallet sets up a bridge that connects users with decentralized finance and Web3.

It is also noteworthy that during the past 12 months, ViaWallet integrated functions, such as staking, cross-chain bridge, Bitcoin TX acceleration, transaction broadcast, signature verification, and address conversion, into its versatile, one-stop asset management services.

Stronger asset protection with enhanced security

In 2022, the crypto industry witnessed more than 300 security incidents that involved over $10 billion in funds, especially hacking, phishing attack, and exploitation of contract loopholes. As a decentralized wallet, ViaWallet insists that users should hold their own private keys. Therefore, how to enhance users’ awareness of security, in addition to basic system security and O&M security, has become a major challenge facing the decentralized space.

In response, in 2022, ViaWallet allowed users to customize the spend limit of DApps. With eye-catching security notices on the authorization page, this feature reminds users of customizing the spend limit to avoid excessive authorization, and thus protects user assets from incidents such as the exploitation of contract loopholes and hacking.

Meanwhile, ViaWallet also introduced Security Tips in its Blog and Safety Knowledge in the Help Center to share security know-how covering common scams, security guidelines for blockchain users, and blockchain security mechanisms from multiple perspectives. By doing so, it has equipped users with more insights into crypto security and enhanced their awareness of asset security.

More user-friendly product experiences

The use of crypto wallets could be quite technically demanding, and has discouraged many newcomers. Over the past year, to help more newbies get quickly started, ViaWallet optimized frequent operations such as creating/importing wallets, backing up mnemonics/private keys, transfers, and TX acceleration/cancellation. Its efforts to enable more user-friendly product experiences also included the introduction of user guidance and upgrade of visual interactions on multiple pages.

Additionally, to make the addresses easier to memorize during transfer, ViaWallet introduced domain name transfer, and the feature now supports transfers via ENS (****.eth), .bit, and NNS (****.nft). More Web3 decentralized domain name services will be available in ViaWallet in the future.

With respect to application experiences, after a thorough upgrade of DApp browser interactions in 2022, ViaWallet now offers more detailed app categories so that users can spot the target app within seconds. Moreover, thanks to the upgrade, users can switch the network at any moment within the DApp to smoothly experience a more versatile selection of DApps. 

Over the past year, while optimizing its products and services in terms of crypto coverage, security, and ease of use, ViaWallet has also earned extensive user recognition. In the new year, the wallet will make persistent efforts to upgrade its products and offer secure, reliable one-stop crypto management services, thereby consolidating the blockchain infrastructure and linking users to the future financial.

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Terra: $20 billion TVL crumbled into dust overnight

In 2021, Terra built a complete decentralized finance (DeFi) ecosystem focusing on UST, an algorithmic stablecoin. Thanks to the fixed-rate protocol Anchor with an annual percentage yield (APY) of 20%, Terra has emerged as one of the public chain ecosystems attracting the most discussion and usage. Its share of total value locked (TVL) rose to 14.88%, second only to Ethereum.

Well known for its high deposit yields, the controversial Anchor protocol has been labeled as a Ponzi scheme. However, the APY of 20% is still a lure to many users who choose to deposit UST in Anchor, which sends Terra’s TVL to an all-time high of over $20 billion.

In May 2022, UST on the Curve was sold massively, and the liquidity pool became imbalanced. As a result, UST decoupled from USD and could not be anchored in the long term. Due to the market panic, a massive amount of UST was removed from the Anchor protocol and then was quickly sold. This selling pressure on UST led to a reflexive downward spiral, known as a “death spiral”. The plummet of UST became the most sensational black swan event in 2022. After UST lost its stability, Terra, a public chain that was once given high hopes, had collapsed with its TVL of $20 billion crumbling into dust overnight.

Ethereum: Post-merge deflation

After countless delays, the Merge of Ethereum, the largest public chain ecosystem with 8 years of existence, finally took place, switching the blockchain protocol from the proof of work (PoW) to the proof of stake (PoS). Although the Merge did not substantially boost the TPS of Ethereum, the subsequent sharding will bring improved performance.

Vitalik, founder of Ethereum, once talked about Danksharding, a new sharding design proposed for Ethereum. The combination of sharding and Rollup can improve the performance of Ethereum to 80,000 TPS, which is equivalent to that of background systems commonly used by banks. In other words, the performance of Ethereum will meet the daily needs of numerous users at that time.

After the Merge, the ETH issuance declined significantly. ETH had even remained deflationary for some time. If the PoW mechanism remained at work, over 1.3 million ETH would have been issued from September 15 (the date of merge) to January 5, 2023. But it turns out that merely 4,500 ETH have been issued ever since, with the annual issuance rate dropping from 3.588% to 0.012%, thus forming a healthier economic model.

Layer 2: A challenge to Layer 1

It is widely believed that 2021 is the year of new Layer 1 public chains and 2022 sees the rise of Layer 2 public chains. Over the past year, Rollup solutions such as Optimism, Arbitrum, StarkNet and zkSync have been updated over again. Optimism’s Bedrock has been upgraded smoothly and is expected to be launched in 2023, which will reduce its transaction fees and increase the TPS. Arbitrum introduced Nitro with better compatibility. The StarkNet mainnet has been upgraded several times to improve the transaction processing speed. The zkSync2.0 mainnet has been basically completed and is expected to be gradually open to ecosystem partners and users in 2023.

Thanks to the updates of the Layer 2 technology, its TVL peaked at nearly 4 million ETH in November 2022, up from 1.5 million ETH in early 2022. The availability of Layer 2 has been more widely verified and recognized.

Newcomer: Public chains with the Move programming language

Layer 1 public chains with the Move programming language undoubtedly came as the greatest surprise in 2022. As a legacy of the abortive Diem project, the Move language is safer and more flexible than the Solidity language used in Ethereum. In addition, Aptos and Sui, two typical public chains that adopt the Move language, were developed by the teams from Diem and Novi projects of Meta, and thus have been favored by many top investors.

Aptos received $350 million in investment, and launched its mainnet in October 2022. It has airdropped tokens worth more than $1,200 to its early testnet users. Driven by its popularity, many Solona projects have turned to Aptos. Currently, Aptos has nearly 100 projects, which  cover such areas as infrastructure, games, NFT and DeFi and bring along a booming ecosystem. In 2022, Mysten Labs, developer of Sui, raised $300 million and was expected to officially launch its project in 2023. 

2022 has been a bumpy year for the crypto market plagued by black swan events including the collapse of the Terra ecosystem. Fortunately, Ethereum, Layer 2 and new Layer 1 public chains have made some breakthroughs, and have never ceased to explore and develop new programming languages, modular public chains, sharding technology and scaling solutions such as Rollup, making 2022 a turning point in the history of public chains.

At present, ViaWallet has supported 48 mainnet assets and over 1 million tokens. In the future, ViaWallet will continue to follow the development of public chain ecosystem, list new assets, and provide users with more asset management services and access to decentralized applications.

We shared some knowledge about domain services and ENS in What is the ENS (Ethereum Name Service). ENS offers great convenience to users as readable domains make it less likely to transfer crypto assets to a wrong address due to input errors. Moreover, ENS can be associated with personal information, making “.eth” the first domain name adopted by many users in the Web3 world.

But ENS does not necessarily represent the final version of decentralized domain names, and it still has some issues to tackle. First, most users own addresses on multiple chains, but ENS is based only on Ethereum. Such chain-specific domains do not share identity information across chains. For example, if a user wants to own a domain name on both Ethereum and AVAX, he needs to register both ENS and Avvy Domain.

In addition, the design defect of the zero-width joiner (ZWJ) on ENS triggers a security concern among some users. A zero-width joiner is a special character whose width is zero but is counted as a character. It is invisible to the human eye but can be detected by a computer. This brings about several different “.eth” domains that look the same.

Currently, ENS has blocked the use of some ZWJs on the client end. But if you search for vitalik.eth on OpenSea, you can still find some ENS domains that look exactly the same. The second domain name in the figure below uses ZWJs that are invisible to the naked eye. Therefore, OpenSea marks the domain page with an exclamation point to indicate the use of non-ASCII characters.

To solve the problems facing ENS, many developers have started to work on new domain projects and tried to build a complete Web3 DID ecosystem, including NFT Name Service (NNS).

Developed by MetaScan Lab, NNS is a decentralized identity domain aimed to help users associate their personal information and crypto assets and create a completely composable, decentralized social network. Compared with other domain systems, NNS can better highlight its NFT characteristics of Web3 domains with “nft”.

Besides, the R&D team of MetaScan Lab tackled the design defects of ENS and improved the domain system, thus avoiding the security risk caused by human-unreadable issues in domains, such as null characters, ZWJs, invisible characters and similar fonts.

Officially launched in October 2022, NNS currently only supports Ethereum and aims to offer domain services across chains. As shown in the roadmap below, NNS will bridge to BSC in Q1 2023 and continue to support other EVM-compatible chains. In Q4 2023, MetaScan Lab will build the Layerzero chain based on DAG and break the barriers of the DID system.

To connect the physical world and the Web3 world, NNS will establish a complete on-chain reputation certificate system in the future. Users can connect NNS with applications such as Link3 and TwitterScan (a Twitter-based crypto sentiment analysis platform launched by MetaScan) to bind the Web3 identity with the Web2 identity. Moreover, NNS’s reputation system will record users’ contributions and achievements based on on-chain data. When other DApps need to use relevant information, it can share information safely by verifying the certificate authority (CA) issued by NNS to users, thus breaking the inter-chain information silo in the Web3 world.

ViaWallet takes the lead in supporting the NNS domain services, allowing users to use the “.nft” instead of lengthy characters and enjoy more convenient transfer.

Try it now: https://viawallet.com/

With the advent of the Web3 era, the competition around DID is intensifying. As a secure and convenient multi-chain, multi-cryptocurrency wallet, ViaWallet supports the transfer through decentralized domains, including ENS (.eth), DAS (.bit) and NNS (.nft). In the future, ViaWallet will continue to develop and support more Web3 applications as a bridge connecting users to the future financial world.

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Users of NFT marketplace Opensea received phishing emails in February 2022, which led to the hacking of mainstream NFTs worth over $4 million; this October, Transit Swap, a fast swap platform was hacked, resulting in a loss of $28.9 million in funds. Both incidents are related to contract authorization.

Contract authorization is an essential requirement of most DApps, and the contract will not be able to call the relevant assets if no authorization is given, which means that the DApp cannot help you swap or stake your tokens.

Although many users believe that their authorization is granted only for a single transaction, developers tend to set the default authorized amount to “Unlimited” in order to avoid repeated authorizations, saving both Gas and time. However, that default setting raises security concerns: If there’s a malicious developer, or if a vulnerability of the contract is exploited, the attacker would be able to transfer users’ tokens without having to get any consent.

ViaWallet now allows users to customize the spend limit of DApps to help users protect their assets and prevent large asset losses, and users can adjust the authorized amount when granting authorizations to third parties.

For instance, when swapping USDC into USDT in PancakeSwap, we first need to grant USDC authorization to PancakeSwap’s contract before the swap, and the authorization window will pop up once we click on “Enable USDC”.

At this point, if you are using ViaWallet, you’ll notice a clear sign reminding you that the authorization will allow the contract to transfer USDC from your wallet, and you’ll be advised to examine if the link is trustworthy to prevent asset theft through malicious contracts.

On the Request Permissions page, we can tell that the spend limit is “Unlimited USDC”. For security concerns, the token amount authorized should be minimized. More specifically, we can click on Spend Limit and change the figure to the exact amount required for the transaction.

Apart from setting a small spend limit, we also advise users to withdraw their authorizations regularly to keep their assets secure. Below are some of the common blockchain explorers that allow users to revoke their authorizations. After connecting your wallet with one of these explorers, you can check your authorizations like spend limits and revoke them as needed.

Revoke authorization on ETH: https://etherscan.io/tokenapprovalchecker

Revoke authorization on BSC: https://bscscan.com/tokenapprovalchecker

Revoke authorization on Polygon: https://polygonscan.com/tokenapprovalchecker

Revoke authorization on AVAX: https://snowtrace.io/tokenapprovalchecker

Revoke authorization on HECO: https://www.hecoinfo.com/en-us/tokenapprovalchecker

When using products such as crypto wallets and exchanges, asset security is the No.1 concern. Going forward, ViaWallet will continue to enhance its security performance, build multiple shields, and help users manage their cryptos in a secure manner.

Follow ViaWallet for the latest news:

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Transaction is the most common scenario in both real life and the crypto world. According to ViaWallet Explorer, there have been around 250,000 new Bitcoin transactions on a daily average. In addition, Etherscan.io revealed that the recent daily transaction volume of the Ethereum network stands at about 1 million, demonstrating the massive demand for cryptocurrency transactions.

Meanwhile, crypto transactions are targeted by malicious players. Recently, some crypto users noticed that sometimes their cryptos are not sent to the recipient, even though it was already confirmed by the blockchain. How could cryptos disappear for no reason?

Let’s try to understand what happened through the hypothetical case of Adam and Smith. Adam transferred 100 USDT to Smith, who successfully received the funds. The next day, Adam tried to transfer another 200 USDT to Smith, and, to save time, he clicked on the historical transaction to copy Smith’s address and paste it to the transaction page. However, when the transaction is completed, Smith says that the 200 USDT didn’t arrive.

As you can tell, the main problem in the above case lies in the transaction address, and some of you might wonder if the address changed. Is that really the case? Did historical addresses change within such a short period?

Smith’s address didn’t change, and what happened was a hoax conducted by the scammer, who disguised his address as one that looks just like Smith’s to exploit the complexities of crypto addresses and to catch users off guard. To be more specific, after Adam made the transaction the first day, the scammer’s program detected that Smith’s address (e.g., T******EifWk7) is similar to his own (T******KifWk7), so he decided to transfer a small amount of USDT to Adam’s address.

A typical crypto address is a ten-digit string consisting of letters and numbers, making it completely unreadable and unmemorable. In the case above, the scammer’s disguised address resembled Smith’s address (the first digit and the last five digits), and Adam mistook the transaction from the scammer as the transfer he had made to Smith after checking the last five digits of that disguised address. He then copied the address and completed the second transaction, transferring 200 USDT to the scammer’s address, instead of Smith’s. What happened to Adam is called a disguised address trap.

 It is not that difficult to identify disguised addresses, but great care is needed to guard against disguised address traps. Here are some tips from ViaWallet:

• Please fully examine the recipient address before making a transfer to identify disguised addresses;

• Save the frequently used addresses into “Address Book” on the “Me” page through ViaWallet; nicknames and remarks could help you locate the recipient address and identify disguised addresses in no time;

• When making transactions, please copy the accurate, full address of the recipient (e.g., deposit address, wallet address, etc.), and do not just copy an address from historical transaction records;

• Do not transact with strangers. We should be careful with transactions from unknown sources, and if there are any security implications, please transfer your assets to a secure wallet address.

In the decentralized world, only users are the sole controllers of their assets. Although scammers would come up with endless tricks, as long as we follow the recommended steps when using crypto wallets, they will not be able to catch us off guard.

Not your keys, not your coins.

Every crypto holder must be familiar with this quote. The recent run on FTX, a top crypto exchange, due to the revelation of fund misappropriation once again reminded us of the fact that “not your keys, not your coins.” To this day, a large number of users and institutions still cannot withdraw their funds on FTX. Although many people would advise you to enhance asset security by adopting a cold wallet, but is it the perfect solution to the problems of asset management?

What are cold wallets?

In our previous article titled Must-know Concepts About Crypto Wallets, we mentioned that crypto wallets are tools used to store our private keys, and there are cold wallets and hot wallets depending on how the private key is stored.

Hot wallets, also known as online wallets, refer to wallets connected to the Internet. For instance, most web wallets, wallet extensions, and wallet apps are all hot wallets. Such wallets promise great ease of use, and we can transfer cryptos and use DApps on webpages and smartphones at any time.

Cold wallets, or offline wallets, are the opposite of hot wallets. They are wallets used without an internet connection. Without access to the Internet, they minimize the risks of hacking. Many crypto users think that cold wallets are just another name for hardware wallets, which isn’t true because, for instance, a wallet generated on a smartphone without an internet connection through ViaWallet is also a cold wallet. By the same token, generating the private key on an offline PC and copying that private key on paper also creates a cold wallet.

Should I choose cold wallets or hot wallets?

Many people go for cold wallets without doing much thinking because they believe that offline wallets are safer, but cold wallets are not designed for all scenarios. For instance, as the private key is not exposed to the Internet, users of a cold wallet must conduct internal, offline authentication through a special device or grant authorization via the offline signature function of an offline phone.

Such operations are troublesome, especially if you use DApps on a daily basis. As such, cold wallets can only meet the needs of long-term crypto holders who only trade cryptos once in a while. If you are a big crypto holder and frequently use DeFi or buy NFTs, a better choice is to store most cryptos in cold wallets while keeping part of liquid funds in hot wallets.

Choosing a safe and reliable hot wallet is also essential. As a decentralized wallet featuring multiple chains and cryptos, ViaWallet offers twofold protection with the security password and protects mnemonics via encrypted backups, which effectively keeps the private key and mnemonics safe and secure. For more information about ViaWallet’s security functions, please refer to ViaWallet: Keeping Your Cryptos Secure Through Multiple Layers of Protection.

Using wallets in safer ways

Adopting a suitable wallet is not a once-and-for-all solution. Although decentralized wallets such as ViaWallet help users mitigate risks through sound product design, as blockchain is inherently decentralized, such wallets offer full control of the assets to users themselves, which means that users must also adopt security measures to stay safe.

When using crypto wallets, be sure to remember the following tips:

• You should always download the App from the official website, and do not download wallet applications from non-official websites;

• Remember to make multiple offline back-ups of your private key or mnemonics, and do not disclose them to any third party or reveal such sensitive information on online platforms such as live chat software.

• You’d better become more security-aware. For example, you can enhance your asset-protection measures by reading the relevant articles in ViaWallet Blog, which regularly releases security know-hows.

In the blockchain world, asset security is always the No.1 priority. Although cold wallets are excellent tools for enhancing security, actual asset management is not that simple, and we can avoid potential asset losses by using crypto wallets in safer ways.

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Although Diem failed, members of its team made concrete contributions. This year, the field of new public chains witnessed another boom, which fostered new categories that include privacy-preserving public chains, modular public chains, and Move-built public chains. In particular, Move-built public chains have attracted the most attention.

What are Move-built public chains?

Move-built public chains refer to public chains built with Move language, the legacy of the aborted Libra. When it released its whitepaper, Diem also published Move, a new smart contract language based on Rust. At the time, this programming language designed specifically for crypto was considered Diem’s biggest highlight.

According to Move: A Language With Programmable Resources released by Diem, the most prominent feature of Move is that the language is safer and more flexible than Solidity, the language used by Ethereum and EVM-based public chains. When it comes to security, as Move distinguishes assets from other data, it avoids problems such as random token generation and arbitrary asset access. Additionally, Move also differs from Solidity in terms of smart contract calls: the former uses a different design that reduced the security loopholes in contracts. As for flexibility, since Move is based on transitive modules, it is easier for developers to optimize and upgrade Move-built chains. More specifically, after a module is upgraded, all smart contracts using the module will be automatically upgraded.

What Move-built public chains are there?

Right now, Aptos, Sui, and Linera are among some of the most trending Move-built chains, and their founding teams are all from Meta, specifically, Diem and Novi (a crypto wallet built for Diem).

Aptos

Of the three, Aptos was launched the earliest. From 2021 to 2022, the project raised a stunning $350 million, which demonstrates its popularity in the capital market. Moreover, not long ago, the Aptos mainnet officially went live, and Aptos airdropped tokens worth over $1,200 to each testnet participant on average, which started a new airdrop craze in the current bear market.

Although Aptos boasts a theoretical TPS of 160,000 at most, its real maximum TPS only stands at 2,107 as of November 7. At the moment, the chain has built a booming ecosystem that spans nearly 100 projects, including genres such as infrastructure, games, NFT, and DeFi, among others.

Sui

Apart from Aptos, Sui is the most trending public chain during the recent period. Following the Aptos airdrop, many speculators turned to Sui, which shares the same origin as Aptos. Last year, Mysten Labs, the team behind Sui, raised $36 million. The team announced last September that it had completed a $300 million fund-raising round. To date, the market cap of Mysten Labs has exceeded $2 billion, which justifies, to a large extent, users’ confidence in the prospects of Sui and its token value.

With respect to security, Sui resembles Aptos in many ways, but the two significantly differ in terms of their architecture. The biggest highlight of Sui is the Sui consensus engine, which is composed of Narwhal and Tusk (replaced by Bullshark in August). Additionally, Sui has upgraded the Move language into Sui Move, which allows it to benefit from improved network performance. According to the relevant tests, an unoptimized Sui validator running on an 8-core M1 Macbook Pro can execute and commit as many as 120,000 transactions per second (TPS). 

Linera

Linera is the newest project among the three chains. In June, the chain raised $6 million during a fund-raising round led by a16z. Although Linera did not clearly state its use of Move, its technical logic based on Rust is very similar to that of Move. Besides, the founder of the project also worked on Novi, so Linera is usually considered as the next hit Move-based project, following Aptos and Sui. Linera focuses on linear scaling to scale up performance and solve throughput limits by adding processing units. That said, as Linera remains in its infancy, not much official information is available.

From these three chains, we can tell that institutional investors have a preference for Move-built public chains. Despite that, the real performance of Aptos following the launch of its mainnet has been controversial. Could the Meta background of Move-built chains help them become the next Solana and win over investors? We will have to wait and see.

Follow ViaWallet for the latest news:

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