The Protocol: Hyperliquid Responds to Decentralization Criticism

1 week ago

Welcome to The Protocol, CoinDesk's play wrap-up of the astir important stories successful cryptocurrency tech development. I'm Ben Schiller, CoinDesk’s Features and Opinion Editor.

In this issue:

HyperLiquid responds to disapproval implicit decentralization

StarkWare launches appchains connected Starknet

Arbitrum deepens ties to South Korea’s Lotte Group

Do Kwon transgression proceedings acceptable for 2026

Pyth Network partners with Revolut successful DeFi information deal

Ripple aims to boost stablecoin’s inferior successful Chainlink deal

AI coins neglect to lucifer 2024 performance, contempt bullish outlook

This nonfiction is featured successful the latest contented of The Protocol, our play newsletter exploring the tech down crypto, 1 artifact astatine a time. Sign up here to get it successful your inbox each Wednesday.

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HYPERLIQUID CRITICISM: HyperLiquid, a large up-and-comer successful the satellite of decentralized finance, came nether occurrence this week implicit claims that the web is overly centralized and hard to enactment with. HyperLiquid is champion known for its flagship decentralized speech and it precocious launched a layer-1 blockchain — each bids by the startup to, according to its flashy web copy, yet "house each finance." Despite earning plaudits for its accelerated and easy-to-use speech interface, HyperLiquid has been criticized for, among different things, operating a closed-source codebase. According to a widely-shared X thread from Kam Benbrik, an worker astatine the validator steadfast Chorus One, the validators powering HyperLiquid are mostly unsighted to however the concatenation works nether the hood, making it hard for them to run the hardware that's expected to tally the chain. Benbrik besides raised concerns that HyperLiquid's highly concentrated token proviso — and its process for admitting validators to its L1 concatenation — marque the concatenation centralized and susceptible to failures. "Hyperliquid indispensable amended transparency, decentralize staking, instrumentality a just validator enactment process, and prosecute much with outer validators," Benbrik wrote. The complaints travel connected the heels of a flurry of affirmative media attraction for HyperLiquid pursuing November's massively palmy HYPE airdrop. It hasn't each been creaseless sailing for the startup, however, with scrutiny arising successful December pursuing reports of imaginable North Korean enactment connected the web — interpreted by immoderate arsenic a motion that the authorities well-known for its crypto-hacking efforts mightiness person HyperLiquid successful its crosshairs. HyperLiquid has batted distant the North Korean information concerns, and it precocious addressed the centralization and closed-source critiques successful an X thread, stating that the criticisms mostly stemmed from "misconceptions" astir its tech. Read more. --Sam Kessler

SOLANA'S FIREDANCER FORGES AHEAD: Solana is charging up with its next-gen blockchain lawsuit "Firedancer," pushing validators moving the concatenation to follow a stripped-down mentation of the upgrade up of a wider, yet-to-be-scheduled authoritative launch. "Firedancer's proponents judge the bundle – developed by the crypto limb of trading elephantine Jump – volition springiness Solana an unbeatable borderline successful crypto's contention to woo planetary fiscal markets onto blockchains," writes CoinDesk's Danny Nelson. "They constituent to its theoretical speed: 1 cardinal transactions per second, orders of magnitude faster than immoderate blockchain-based strategy today." --Sam Kessler

STARKWARE APPCHAINS: Starknet, the layer-2 blockchain connected Ethereum known for its clasp of zero-knowledge (ZK) cryptography, is adding appchains. StarkWare, the superior developer of Starknet, told CoinDesk that its "SN Stack" volition fto developers easy physique blockchains tailored to circumstantial crypto usage cases. Read more

ARBITRUM-a-LOTTE: Arbitrum, the largest layer-2 web connected Ethereum, plans to deepen ties with Lotte Group, the multibillion-dollar South Korean conglomerate known for its immense portfolio of buying malls, media companies and amusement properties. Offchain Labs, the developer down Arbitrum, and the Arbitrum Foundation, the non-profit that stewards the project's development, said a fiscal woody is successful the works that would cement Arbitrum arsenic the main blockchain infrastructure supplier for "Caliverse," Lotte's metaverse gaming platform. Read more

AVALANCHE UPGRADE: Avalanche, present the tenth-largest L1 by full worth locked (TVL), activated its highly anticipated Avalanche9000 upgrade, marking its biggest method changes since motorboat successful 2020. The web has been prepping these changes for months, with caller features that volition chopped the costs for sending transactions, operating validators and gathering applications connected the network. Leaders astatine Avalanche said the upgrade is meant to pull developers, encouraging them to make customized blockchains utilizing its technology, known arsenic subnets, oregon “L1s." Read more.

DO KWON TRIAL: Terraform Labs co-founder and erstwhile CEO Do Kwon’s transgression fraud proceedings successful the U.S. has been tentatively scheduled for January 2026, allowing prosecutors and Kwon’s defence attorneys clip to reappraisal the “massive” six-terabyte trove of information expected to beryllium produced during the find process. During an archetypal proceeding successful Manhattan this week, pb authoritative Jared Lenow told the tribunal that the authorities expected to look further delays owed to challenges accessing encrypted accusation and unlocking 4 compartment phones provided by Montenegrin authorities erstwhile they extradited Kwon to the U.S. connected Dec. 31st. Lenow added that the authorities indispensable besides construe extracted worldly from Kwon’s autochthonal Korean. Read more.

PYTH PARTNERS: Blockchain oracle steadfast Pyth Network has partnered with neobank Revolut to larboard integer banking information into decentralized finance. Revolut volition supply information for much than 500 markets including overseas exchange, equities and commodities. Revolut besides runs a crypto speech though measurement information is not published. Pyth competes with ChainLink and aims to supply close terms feeds for DeFi protocols. It airdropped its autochthonal token (PYTH) successful 2023 and has $7.5 cardinal successful worth secured connected its oracle, according to DefiLlama. Pyth besides receives information from crypto exchanges Bitstamp, Bybit and Binance arsenic good arsenic respective trading firms specified arsenic Jane Street and Cumberland DRW. Read more.

AI COINS: AI-crypto tokens are failing to unrecorded up to their lofty 2024 goals contempt Nvidia's (NVDA) recent conference sparking bullish sentiment among AI stocks successful the accepted markets. Last March, the NEAR token doubled successful the lead-up to Nvidia's yearly conference, gains that were mirrored crossed the wider crypto AI market. Fetch.AI (FET), the graph (GRT) and singularityNET (AGIX) each posted important rallies to the upside successful unison with the conference. Why are AI tokens losing momentum? One reason: the emergence of AI cause tokens. Read more.