WhiteboardCrypto Newsletter - Nov 11

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

Cardano and Polkadot dance

The Cardano blockchain, founded by Ethereum co-founder Charles Hoskinson, has long been aiming to be a multi-chain, interconnected ecosystem. On Nov. 3, they announced that they’ll be using Polkadot’s Substrate framework to help launch “partner chains” that are essentially like layer 2s on Ethereum. They will use Cardano’s main chain as the settlement layer, with its security and liquidity, but have their own operations as required.

Learn more here.

Aave security vulnerability

On November 4, Aave paused their V2 market on Ethereum and a few select assets on V3 due to a report of an undescribed issue. They claim user funds are at risk, and the reason for keeping the issue private for now is to keep them safe. A vote is happening about restarting the protocol that will end Nov 11. Aave V3 is still operating on Ethereum, Base and Metis, and V2 is working on Polygon and Avalanche still. So if you’ve been unable to do anything on the platform this week, that’s why. Hopefully the issue, whatever it is, will be resolved soon!

Learn more here.

Bank of England released stablecoin regulations

With the hope that stablecoins will be used by the public for “everyday payments”, the BoE passed stablecoin regulations that will take effect in 2024. This will make fiat-backed stablecoins legal. Interestingly, issuers will need permission from the BoE before circulating stablecoins “in or from the country”. And of course they want to focus on stablecoins backed by the British pound. This sounds an awful lot like Central Bank Digital Currencies (CBDCs). We’re curious how effective this will be in pulling liquidity into the country. Now, the EU, BoE, and Japan all have stablecoin regulations. Time for the US’ turn?

Learn more here.

Hacks on Poloniex and Monero

Monero, a privacy-focused blockchain, had their community crowdfunding wallet hacked on Sept 1, which was worth about $460,000 USD. Why are we reporting something that happened more than two months ago? Because they only just released the info this month. The source of the hack has not yet been identified. This crowdfunding wallet funds development proposals from its members, and only two people had access to the seed phrase.

Separately, the Poloniex exchange backed by Justin Sun of notorious (presumed) Tron and BitTorrent market manipulation, was hacked for about $100m USD worth of crypto. Sun claims to be working with other exchanges to recover the funds. We aren’t claiming anything, but if it smells like fish…

Thanks for reading and I hope you learned something!

- Theodore