Welcome to The Protocol
CoinDesk's weekly wrap-up of the most important stories in cryptocurrency tech development.
In this issue:
- HyperLiquid responds to criticism over decentralization
- StarkWare launches appchains on Starknet
- Arbitrum deepens ties to South Korea’s Lotte Group
- Do Kwon criminal trial set for 2026
- Pyth Network partners with Revolut in DeFi data deal
- Ripple aims to boost stablecoin’s utility in Chainlink deal
- AI coins fail to match 2024 performance, despite bullish outlook
Network news
HYPERLIQUID CRITICISM: HyperLiquid, a notable player in decentralized finance, faced critical feedback this week regarding its alleged centralization and user-unfriendliness. This platform recently introduced a layer-1 blockchain in hopes to comprehensively "house all finance." Though it has garnered praise for its user-friendly exchange platform, issues such as a closed-source codebase have drawn scrutiny. A widely circulated post by Kam Benbrik from Chorus One highlighted that many validators lack insight into the operational mechanics of HyperLiquid's blockchain, complicating their responsibilities.
Benbrik expressed significant worries about HyperLiquid’s concentrated token supply and its validator admission process, deeming them potential risks for centralization and failure. He stated, "Hyperliquid must improve transparency, decentralize staking, implement a fair validator selection process, and engage more with external validators."
Rising scrutiny follows HyperLiquid's successful HYPE airdrop in November, yet the startup also faced concerns tied to potential North Korean activity linked to its operations. HyperLiquid has refuted these security concerns and addressed allegations of centralization in an X thread, attributing much of the pushback to "misconceptions" about its technology.
SOLANA'S FIREDANCER FORGES AHEAD: Solana gears up to roll out its next-generation blockchain client, Firedancer. It encourages validators to adopt an earlier version of the upgrade prior to its official launch, anticipated but not yet scheduled. Advocates of Firedancer believe that this software, developed by Jump's crypto arm, could provide Solana with a substantial edge in attracting global financial markets to blockchain technology, with projected speeds up to one million transactions per second.
STARKWARE APPCHAINS: StarkWare has revealed that its SN Stack will enable developers to create tailor-made blockchains for specific applications, enhancing its Starknet layer-2 blockchain on Ethereum.
ARBITRUM-a-LOTTE: The leading layer-2 network Ethereum, Arbitrum, is set to strengthen its collaboration with South Korea's Lotte Group on a significant financial partnership intended to solidify Arbitrum as the primary blockchain backend for Lotte's metaverse gaming platform “Caliverse.”
AVALANCHE UPGRADE: Avalanche has initiated its highly awaited Avalanche9000 upgrade, marking its greatest technical overhaul since its launch in 2020, with new features designed to allure developers.
DO KWON TRIAL: A trial for Do Kwon, the former CEO of Terraform Labs, is anticipated in January 2026, allowing both prosecution and defense time to delve into a vast six-terabyte data set expected to be presented.
PYTH PARTNERS: The Pyth Network has teamed up with Revolut to deliver banking data into decentralized finance. This collaboration will involve data across more than 500 market categories, including forex and equities.
AI COINS: Despite high expectations for 2024 following a bullish sentiment from Nvidia’s recent conference, AI-centric crypto tokens have fallen short of anticipated performance, as competition emerges from newer AI agent tokens.
Money Center
More Sovereigns to Buy BTC: An increase in purchases of Bitcoin by nation-states, central banks, and sovereign wealth funds is expected, according to Fidelity Digital Assets.
Companies, too: Various public companies have outlined strategies for Bitcoin treasury management, even as acquisitions remain on the horizon.
Regulatory and policy: Key policy discussions are happening, including Ripple's Brad Garlinghouse meeting with Trump, sparking renewed interest in XRP.
