What's going on with Ledger?!?! 😱
Ledger's recent update has caused some controversy.
GM, frens! Ambire here with out weekly newsletter. Today we’ll talk about security concerns regarding Ledger, Worldcoin, OpenAI’s Sam Altman and privacy, Lido v2 going live, Tether’s latest strategic moves, US Secret Service’s Reddit AMA and a brief word on how Ethereum gets cheaper to use as the meme season dies down. Let’s get down to it!
Ledger in hot water over security concerns
Ledger's recent update has caused some controversy. The update allows its devices to send coded parts of users' seed phrases, which function like passwords, to other people. Ledger claims this will help users recover their seed phrases, but some critics argue that it could create security vulnerabilities.
Hardware wallets are designed to store private keys for crypto offline, and are often considered more secure than hot wallets, which store keys on devices with internet access. So the whole point of owning a hardware wallet is to keep their users' crypto safe on a physical device and away from the internet and potential hacks, something which the update could potentially undermine.
Bruh lmao just reply with this under every tweet ledger is paying ct accounts to shill
“oops we accidentally deployed firmware that let us extract your private keys and didn’t tell you or let you know we had the capacity to do this for years”
Nah you shouldn’t exist. https://t.co/05eQ7vvqTG
— gainzy (@gainzy222)
May 17, 2023
Ledger has responded to these criticisms by saying that their update is a "secure, privacy-first" way to help users recover their seed phrases. But many security experts remain skeptical, citing the potential for a hacker to exploit the protocol at some point during the code transfer.
Never get scammed again with this one simple trick: https://t.co/ggwU42StU9
— PLATO (@PlatoNFT)
May 16, 2023
Worldcoin, Sam Altman and privacy
Sam Altman (of OpenAI) seems to be on the cusp of a major victory in the form of his cryptocurrency project, Worldcoin. According to sources close to the situation, Altman's company is reportedly in advanced negotiations with a group of investors who are willing to invest upwards of $100 million for further development.
Notably, some well-known names appear among existing investors for Worldcoin, including venture capital powerhouse Andreessen Horowitz (a16z), Barry Silbert's Digital Currency Group (DCG), and Coinbase Ventures.
@DCbuild3r @worldcoin I can no longer see my reflection in mirrors, is this a common side effect?
— Roko (@RokoMijic)
May 11, 2023
The project first made headlines in 2021 when Altman announced that he was paying people to volunteer their biometric data. This sparked a heated debate as many experts questioned the security of the collected data and the potential for fraud. In March last year, Worldcoin even had to pull out of several countries due to data privacy concerns and technical challenges.
This looks like it produces a global (hash) database of people's iris scans (for "fairness"), and waves away the implications by saying "we deleted the scans!"
Yeah, but you save the *hashes* produced by the scans. Hashes that match *future* scans.
Don't catalogue eyeballs. https://t.co/uAk0NYGeZu
— Edward Snowden (@Snowden)
Oct 23, 2021
There are many questions that remain unanswered, as the investors involved have yet to reveal the details of their plans. But whether it is made for the greater good or not, Worldcoin is certain to be one of the most talked-about crypto projects soon, so that means it is worth keeping an eye on.
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Lido V2 is live
Lido is making big moves this week. The popular Ethereum staking platform just released Lido V2, the second version of its platform. This welcome development allows users to directly withdraw their staked Ethereum (ETH) and take full advantage of the decentralized network.
A major feature of this update is the 1:1 withdrawal ratio. This means that stakers can withdraw their funds in the exact amount of what they originally invested, ensuring a hassle-free experience with no hidden costs or fees.
Over $10B of $ETH has been enabled to be withdrawn from @LidoFinance this week.
Lido v2 enables in-protocol ETH withdrawals, along with further decentralization of the network.
Lido's v2 Future: An important breakdown 🧵⬇️ https://t.co/OaKqodefxS
— Delphi Digital (@Delphi_Digital)
May 17, 2023
This important development arrives in the context of a landscape where Lido holds an impressive 76% share of all liquid staked ETH in existence.
Lido promoted decentralization through its system of node operators. Each operator underwent a thorough vetting process and approval vote from LDO holders before being entrusted with the responsibility of validating ETH staked with Lido. This has contributed to the platform's success and security, allowing users to benefit from both the convenience of a staking service and the trust of a decentralized network. With Lido V2 now live, a major step for the Ethereum network has been taken. This could mark a turning point in the evolution of staking, with decentralization becoming increasingly entrenched within Ethereum's foundation.
Tether's latest strategic moves
Tether Holdings (a company that issues USDT) has aggressively minimized its counterparty risk in the first quarter of 2023 by pulling over $4 billion out of banks. This move has resulted in a "substantial reduction" of counterparty risk, as reported by the company in its post to promote the latest attestation by BDO Italia.
Tether's Latest Q1 2023 Assurance Report Shows Reserves Surplus At All-Time High of $2.44B, up $1.48B in Net Profit; New Categories for Additional Transparency Reveals #Bitcoin and #Gold Allocations
— Tether (@Tether_to)
May 10, 2023
The drastic drop in its bank deposits, from $5.3 billion to just $481 million, was accompanied by a surge in its market capitalization from $66 billion to over $82 billion. According to Tether, the remaining bank deposits are spread out among several banks, which is an effective strategy for avoiding losses in the event of a single bank failure. Tether stresses that its strategic move of reducing its counterparty risk is an important step in its journey to becoming the most trusted stablecoin provider.
Tether has also said that it is continuing to invest in Bitcoin. On May 17, the company announced that it would direct up to 15% of its operating profits towards purchasing Bitcoin.
Starting this month, Tether will regularly allocate up to 15% of its net realized operating profits towards purchasing Bitcoin. These Bitcoin shall be considered on top of the minimum reserves assets that 100% back tether tokens.
More 👉 https://t.co/7zC2swgwWH https://t.co/BOcSDjjmDf
— Tether (@Tether_to)
May 17, 2023
According to the company, this move is designed to “strengthen and diversify its reserve holdings and ensure their stability.” The decision to invest in Bitcoin is a long-term strategy, as Tether has stated that it does not plan to sell its Bitcoin holdings. Tether’s CTO, Paolo Ardoino, also stated that Tether's excess reserves exceed its Bitcoin holdings, which positions the company well in terms of stable growth.
Tether remains the cornerstone of the crypto market and while it stays afloat, so will the entire industry. Despite the risks and active FUD, it is reassuring to see that Tether is actively taking steps to strengthen itself.
US Secret Service discussed potential of using blockchain tech to fight crime in a Reddit AMA
During a Reddit "Ask Me Anything" session on Monday, the US Secret Service praised the transparency of blockchain technology and showcased their own NFT collection.
The US Secret Service announced it will will hold a Reddit AMA on crypto later today 👀🤔 https://t.co/WWXitYGZmF
— Crypto Crib (@Crypto_Crib_)
May 15, 2023
The Secret Service and California cybercrime authorities discussed the various ways criminals use scams and other illegal activities to steal money. They both noted that blockchain gives agencies the ability to track the flow of money, making it easier to catch criminals.
When asked if the Secret Service would consider releasing its own token or coin, the agents highlighted their NFT collection released by the San Francisco branch. They said that this was a reflection of how they are using creative ways to promote greater transparency and serve as a reminder of the agency’s commitment to fighting financial crimes. Although the connection between NFTs and preventing crime remained largely unclear.
Research corner: Ethereum gets cheaper to use as the meme season dies down
DeFi traders have received a much-needed reprieve from soaring Ethereum transaction fees, which slammed the brakes on many users' ability to transact. After reaching an all-time high of over $20 per basic transaction in April, costing users a small fortune to execute trades, the cost has dropped 64% to roughly $7 per transaction.
This significant cost reduction is thanks in no small part to the waning intensity of the memecoin trading frenzy that drove fees up so drastically. Since late April Ethereum’s gas fees had been pushed upwards by an influx of users trading popular tokens derived from internet memes like Pepe the Frog.
As the hype around these memecoins has died down, so too have the gas fees, offering more accessible DeFi trading opportunities for users. While Ethereum still lags behind certain networks in terms of cost efficiency, its on-chain scaling projects are likely to drive down fees even further in the coming months.
The fun page: our weekly meme collection
Showing up to a crypto conference with 0.2 ETH in your wallet https://t.co/r1m6QRDPs8
— Alan Carroll (@alancarroII)
May 17, 2023
When everyone’s arguing if Ledger is secure but you keep everything on a hot wallet https://t.co/J03Y5tQLh3
— alexjm 🍿 (@alexjmingolla)
May 16, 2023
That's all for now, frens.
We'll see you next week. And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us and we look forward to seeing you back next week. Cheers!
Yours, The 🔥 Team
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