[Daily] ETH in the shadows

Good morning! Welcome to The Daily Moon. Porsche thought they were on to something when they unveiled their NFT collection. But it went sour quickly when it fell below the floor price. People weren’t happy with the offer in the first place, they called it a cash grab. 🤷

As of Tuesday, 8PM IST

The markets stayed cautious. Bitcoin was at ~$22,870 and Ethereum dipped to $1,618 levels. Nasdaq fell in early trade. Back home, Sensex and Nifty ended flat.

ETH’s Shadow Fork Is On

Ethereum developers have started a test drive for the Shanghai update. As part of this, something called a “shadow fork” was created. It’ll be a testing space to iron out any issues before the hard fork.

So, what is it?Shadow fork is similar to a pilot. Developers launch a testnet to figure out whether Ether staking withdrawals can be rolled out smoothly. More than 14 millions ETH tokens are currently staked. A lot of it, we don’t know how many yet, will be un-staked after the Shanghai hard fork in March. But first, the platform needs to be readied.

What will the shadow fork do?It’s akin to detective work. Two developers will create some malicious nodes and send it to other testnet nodes. These nodes will contain some shady links to join a false version of the network. If anyone joins it, it’ll be termed a failure. For now, nobody has fallen for it. But the idea is to see whether the network is prone to attacks before the Shanghai launch.

Meanwhile…The ETH pendulum is swinging hard, again. At the end of 2022, Ethereum was deflationary meaning more ETH was burned than minted. When 2023 kicked off, it turned inflationary because more ETH was minted than burned. Now again, it is in a deflation mode on the back of ETH burned during NFT sales.

XRP Heads To The Bulls

XRP is under a bull cover. The token’s up over 9% in the past seven days. With parent Ripple optimistic of a court win against the SEC, the rally may continue for a while.

What do the charts say?There is a bullish pattern. A technical indicator called Relative Strength Index or RSI is above 50 for XRP. That’s an indication that traders are on a buy mode for now. More than $1.5 million in short positions were liquidated, meaning whoever bet on XRP’s fall lost money.

What’s driving it?While we can never predict the outcome of court cases, Ripple’s side is confident of a win. XRP even breached two previous resistance levels, another signal that the bullish momentum is here for a while.

New Day, New Regulations

The world keeps evolving their point of view when it comes to crypto. Here’s a rundown of how regulations have changed in a few select geographies.

JapanThe land of the rising sun has been extremely progressive. A local body in the island country announced that it will allow stablecoins, such as Tether, to be traded as early as June. Each token that is placed on the allowed list will be inspected to showcase if it can protect traders and avoid a Terra-Luna like situation.

European UnionAt the other end of the world, the EU asked banks who hold crypto to set aside cash reserves worth 1,250% of the token value. Essentially, even if all tokens multiplied in their value and some more, the institutions will be able to withstand a bank run.

North Korea Hacked Harmony?

The FBI has deduced that it was North Korea’s Lazarus group that were the masterminds behind the Harmony hack last year.

Wait, what happened?ICYMI, in June last year, there was a $100 million hack at Harmony. The hackers swiped Ethereum by exploiting holes in the security system. Now, the fun part is that the hack wasn’t discovered until the money was being laundered and it rang alarm bells from the exchange. A panic ensued, holes were patched but the damage was done. But the question remained: who orchestrated the hack.

Did they do it?It’s North Korea so we’ll never know. But there have been other hacks which have been traced back to the country.

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