Network News
BUTERIN SAYS STABLECOINS HAVE DEEP FLAWS: Ethereum co-founder Vitalik Buterin said the crypto industry has yet to solve some of the most basic design problems behind truly decentralized stablecoins, arguing that many existing systems rely on fragile assumptions that could break down over time. In a post published on X, Buterin laid out what he described as three core challenges that remain unresolved. Rather than promoting a specific project or proposing a new stablecoin, he framed the post as a critique of how decentralized stablecoins are designed and why those designs may not hold up over the long term. At the most basic level, stablecoins are cryptocurrencies designed to maintain a stable value, typically by pegging to the U.S. dollar. While some are issued by companies that hold dollars or dollar-equivalent assets, decentralized stablecoins aim to maintain stability through code, collateral and market incentives. Buterin’s first concern was that most decentralized stablecoins still depend on the U.S. dollar as their reference point. While he acknowledged that tracking the dollar makes sense in the short term, he argued that systems meant to be resilient to political or economic shocks should not be tied indefinitely to a single national currency. Over long time horizons, he wrote, even moderate inflation could erode the usefulness of a dollar peg. Buterin suggested that future stablecoins might instead track broader price indexes or measures of purchasing power, rather than the dollar alone. The second issue Buterin highlighted involved oracles — the mechanisms that supply blockchains with real-world data such as asset prices. Because blockchains cannot access external information directly, they rely on oracles to report prices used by smart contracts. According to Buterin, if an oracle can be manipulated by someone with enough capital, the entire system becomes vulnerable. — Siamak Masnavi Read more.
ZCASH DEVELOPER QUITS, TOKEN FALLS: Electric Coin Company (ECC), one of the main development firms behind the privacy-focused crypto network Zcash, says its entire team has left following a dispute with Bootstrap, a nonprofit created to support the network. The token, ZEC, fell nearly 14% in the 24 hours after the announcement. Josh Swihart, CEO at ECC, wrote on X that a majority of Bootstrap’s board members — naming Zaki Manian, Christina Garman, Alan Fairless and Michelle Lai (ZCAM) — had moved into “clear misalignment” with what he described as Zcash’s mission. Swihart said ECC’s staff were “constructively discharged,” arguing that the terms of their employment had been changed in ways that made it impossible to do their jobs “effectively and with integrity.” A constructive discharge is when employees quit because conditions are changed so severely that staying becomes unrealistic — even if they weren’t formally fired. — Shaurya Malwa Read more.
‘SMART CASHTAGS’ COMING TO X: Elon Musk’s social media platform X is developing a feature designed to make financial and crypto-related discussions more precise on the platform, according to a post by its head of product that appeared a day after backlash from parts of the crypto community. In a post on X, Nikita Bier, said the platform is developing “Smart Cashtags,” a feature that will enable users to specify the exact asset or smart contract they are referring to when posting a ticker. Bier said users will be able to tap those tags directly from their timeline to view real-time price data and all related mentions of that asset. “X is the best source for financial news — and hundreds of billions of dollars are deployed based on things people read here,” Bier wrote, adding that the company is collecting feedback as it iterates toward a potential public release next month. Solana Labs highlighted the crypto implications shortly after Bier’s post, saying Smart Cashtags would allow users to tag Solana-based tokens and view charts and related information directly on X. In a screenshot shared alongside that post, users typing a dollar sign appear to be prompted to select from a list of assets — including cryptocurrencies such as bitcoin, BONK and Base — suggesting posts could be linked to asset-specific pages showing prices and related discussion. — Siamak Masnavi Read more.
BTC’S DEFENSE AGAINST QUANTUM COMPUTING: Media coverage of the threat posed by quantum computing usually identifies cryptocurrencies as a key area of classical cryptography that will be effortlessly broken when the technology hits the mainstream which, according to some estimates, may be less than a decade from now. Simply stated, computer chips based on quantum mechanics can perform some calculations exponentially faster than a traditional processor. That speed leaves much of existing cryptography, which is predicated on the time taken to solve complex equations, under threat. Not surprisingly, there is a drive to identify approaches that can mitigate the risk, a point glossed over in much of the “parallel universe” reporting about the latest quantum chips. Among those efforts to develop quantum-resistant algorithms is to replace today’s public key encryption with an alternative known as lattice-based signing.One approach to protecting the $2 trillion Bitcoin blockchain has been unveiled by post-quantum cryptography specialist BTQ Technologies (BTQ): Bitcoin Quantum, a permissionless bitcoin fork it says meet the challenge. This is a public, runnable testnet where miners, developers, researchers and users can stress-test quantum-resistant transactions and surface the operational tradeoffs before any mainnet-level migration conversation becomes urgent, according to BTQ’s head of quantum innovation Chris Tam. The system includes a block explorer and a mining pool, providing immediate accessibility. – Ian Allison Read more.
In Other News
- A collapse in the price of ether would damage the Ethereum ecosystem’s ability to function as a settlement infrastructure for financial activity, a Bank of Italy economist found. That would hurt the payment, settlement and tokenized finance systems such as stablecoins and onchain lending services that rely on the blockchain for ordering transactions and confirming asset ownership, Claudia Biancotti wrote in a new research paper. Biancotti examined how an extreme fall in ETH could affect Ethereum’s functionality rather than treating the network as just another speculative crypto market. She noted that disruptions under stress would hit applications that process billions of dollars worth of transactions each day. The proof-of-stake blockchain relies on validators, who are paid in ETH, to secure the system. If ether were to lose most or all of its value, Biancotti argues that some validators would, quite rationally, shut down. That would reduce the amount of stake securing the network, slow block production and weaken Ethereum’s resistance to certain attacks. Transaction finality and reliability could degrade at precisely the moment users rely on the network most. The paper models this dynamic as a shift from market risk to infrastructure risk. It’s a framing that reflects how regulators are increasingly viewing blockchains. Ethereum is no longer just a platform for speculative tokens, but a settlement layer for stablecoins, tokenized securities and other financial instruments. — Shaurya Malwa Read more.
- For Bryan Johnson, the entrepreneur who sold Braintree (and Venmo) to PayPal for $800 million, the transition from fintech to “fountain of youth” isn’t a pivot, it’s a logical progression. While Johnson is now the public face of Project Blueprint, a rigorous longevity protocol, he views his interest in crypto as part of the same fundamental struggle. In Johnson’s framing, inflation and aging function as invisible taxes. Inflation quietly erodes purchasing power over time, just as aging steadily degrades the body’s biological capital. “Aging has the same philosophical underpinnings as inflation,” Johnson said on CoinDesk’s Gen C podcast. “Both are the slow death of an intelligent system.” Johnson’s ties to the crypto industry run deep. He was an early partner of Coinbase while running Braintree, experimenting with bitcoin payments when the user experience was still “clunky” and poorly understood. At the time, he said, the goal was not ideological, it was infrastructural. Braintree wanted to be “indifferent as to where the money came from” and simply provide the rails. Johnson’s career in payments, which culminated in an acquisition by PayPal in 2013, was always a means to an end. Growing up in a blue-collar community in Utah, he recognized early on that trading time for money was not the life he wanted. Payments offered leverage, scale and speed. It created a pathway that later allowed him to pivot toward what he calls “species-level” problems. — Sam Ewen Read more.