WhiteboardCrypto Newsletter - Apr 5

Welcome back to this week's edition of our WhiteboardCrypto Newsletter!

Another tool to stop MEV attacks

We recently released a video on MEV (Maximal Extractable Value), so check it out for a deeper dive! MEV refers to ways traders manipulate transactions—like reordering or front-running—to profit. A related concept, OEV (Oracle Extractable Value), exploits price differences across oracles—services that provide blockchains with off-chain data, such as price feeds across protocols, dApps, or other chains. We have a video about oracles too!

The news? Aave, one of the biggest platforms for crypto lending, has teamed up with Chainlink to stop traders from taking unfair advantage of price updates on oracles. By using Chainlink’s new system, Aave can reduce losses caused by certain trading strategies that exploit how price data is updated on the blockchain.

Learn more here.

More privacy on Ethereum

Privacy is a right—unless a crime is involved. A key example is Tornado Cash, a crypto mixing service shut down after regulators claimed criminals used it to hide stolen funds. Since they couldn’t ensure the funds were legitimate, authorities arrested its creators, and court battles continue.

But privacy has many valid uses, like donating anonymously or paying taxes discreetly. Since blockchains are fully transparent, balancing privacy with legality has been a challenge. Launched on March 31, a new Ethereum tool, called Privacy Pools, lets users make deposit funds and later withdraw them with the ability to prove that they are legit using zero-knowledge proofs.

Learn more here.

Ethereum’s revenue suffers

Ethereum’s blob fees just dropped 73% to their lowest levels this year, and that’s a big deal. Why? Because it shows how much the recent Dencun upgrade has changed the way Ethereum handles transactions. Before the upgrade, Ethereum stored a lot of data on-chain, making transactions more expensive. But now, thanks to "blobs" (temporary storage for L2 data), users are paying way less in fees. That’s great for making Ethereum cheaper to use, but it also means Ethereum itself is earning less from fees.

This shows that Ethereum is becoming more dependent on Layer 2 networks. If L2 activity keeps growing, everything stays on track. But if L2s don’t generate enough transaction volume, Ethereum could struggle to sustain its fee-based revenue. The revenue is used for paying validators to secure the network, burning ETH to reduce supply, and more, so it’s important that Ethereum continues to bring in revenue.

Learn more here.

Thanks for reading and I hope you learned something!

- Theodore