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Terra 2.0 is Not a Hardfork But the Genesis of a New Blockchain, says The Team Behind LUNA

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Terra 2.0 is Not a Hardfork But the Genesis of a New Blockchain, says The Team Behind LUNA

Quick takeaways:

  • The team at Terra has clarified that the new chain that will arise from Proposal 1623 is not a hardfork.
  • The Terra Team has described Terra 2.0 as the genesis of a new blockchain.
  • Dapps from the old chain will not pre-exist on the new Terra (LUNA) chain.
  • Voting for the new chain and airdrop of new tokens is still underway.
  • However, questions linger on the future of the Terra (LUNA) project if its assets are frozen in South Korea.

The team behind the Terra (LUNA) project has clarified via Twitter that the blockchain is not actually undergoing a hardfork, but rather the new chain created will be the genesis of a new blockchain.

The team at Terra went on to define a hardfork as a change in an existing blockchain that results in two chains with a shared history but different future paths. They said:

The important distinction here is that a forked blockchain “shares all of its history with the original (chain)”, which Terra 2.0 will not.

Terra 2.0 = the genesis of a new blockchain.

If Prop 1623 passes, a brand new blockchain (Terra) shall be created starting from genesis block 0 that will not share history with Terra Classic.

Dapps on Terra Classic Will Not Pre-exist in the New Chain of Terra (LUNA)

Furthermore, the team explained that popular decentralized applications built on Terra Classic would not automatically exist on the new chain of Terra (LUNA). The Dapps will have to be migrated to the new chain.

Voting on Proposal 1623 Continues, But the Fate of Terra Hangs in the Balance as S. Korean Authorities Aim to Freeze the Project’s Assets

At the time of writing, there are only 20 hours left before voting on Terra Proposal 1623 concludes. According to Terra Station, 77% of the possible votes in the Terra community have been cast in total. Additionally, 65.99% of the voters are for the proposal.

Terra 2.0 is Not a Hardfork But the Genesis of a New Blockchain, says The Team Behind LUNA 12
Progress on the voting of Terra Proposal 1623 with 20 hours left. Source, Terra Station.

By the look of things, Terra proposal 1623 to introduce the new chain will sail through smoothly since it has met the pass threshold of 50% and without the 33% veto threshold.

However, the fate of the project might hang in the balance based on reports that South Korean authorities are seeking to freeze the Luna Foundation Guard’s assets. The potential consequence of an early seizure of the LFG’s assets has been explored by Terra Community member @FatManTerra, who came to the following conclusion.

If LFG assets are frozen by the police too soon, the small holder refund that they guaranteed may not take place.

Let’s hope bureaucracy drags its feet on this one, at least for the time being. I have been contemplating several matters (albeit sleep-deprived) – more to come soon.

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Ethereum

Crypto Community Holds its Breath as the EU Finalizes Regulations on PoW and Unhosted Wallets this Month

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Crypto Community Holds its Breath as the EU Finalizes Regulations on PoW and Unhosted Wallets this Month

Summary:

  • EU legislators are estimated to finalize regulations on proof-of-mining crypto activities and unhosted wallets by the end of June.
  • Such regulation will have enormous implications for the crypto industry in Europe and globally.

The crypto community is anxiously watching as EU legislators finalize regulations that will affect proof-of-mining activities and unhosted (non-custodial) wallets within the region.

According to Patrick Hansen, a Crypto Venture Advisor at Presight Capital, the two bills will most likely be finalized by the end of this month. Furthermore, their approvals as is, or with modifications, will ‘have huge implications for the crypto market in the EU and beyond.’

NFTs, Stablecoins, DeFi, and Environmental Impact Remain the Main Topics of the MiCA Bill.

For the MiCA bill, Mr. Hansen explains that the legislation is in the trialogue stage where all three EU institutions of the Council, Parliament, and Commission meet on June 30th to discuss and possibly agree on a few topics that need to be worked on further.

Firstly, the legislators need to decide whether NFTs fall under the MiCA bill and whether to include consumer protections. Secondly, stablecoins issuance will be determined, including the possibility of implementing thresholds and supervision.

Thirdly, the DeFi industry might just be exempt from the reach of the MiCA bill, with a separate report being scheduled for 2023. Fourthly, the environmental impact of crypto operations in the EU will be ironed out given that Europe’s legislators have already decided that it would not completely ban Proof-of-Work blockchains such as Bitcoin.

Proposal for AML and KYC Procedures When Transacting with Unhosted (Non-Custodial) Wallets.

For the EU proposed bill to implement AML and KYC procedures when transacting with unhosted (non-custodial) wallets, the region’s legislators still have the following to debate:

  • Verification of unhosted wallets. The EU parliament favors the proposal, but the Council and Commission are against it.
  • The EU council suggests that crypto-asset service providers implement on-chain analytics to address the AML risk.
  • There is also the debate on whether to keep the requirement to declare transactions over one-thousand euros to be reported to relevant authorities.

At the time of writing, it is not clear whether the EU legislators will agree on all the issues of the second bill regarding Un-hosted wallets. Consequently, deliberations could roll into the second half of the year.

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Ethereum

Harmony Protocol Offers $1M Bounty for the Return of Stolen Funds and Information on the Bridge Exploit

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Harmony Protocol Offers $1M Bounty for the Return of Stolen Funds and Information on the Bridge Exploit

Summary:

  • Harmony Protocol has offered a $1 million bounty for the return of the stolen funds from the hack of its Horizon bridge and for information on how it happened.
  • Harmony Protocols’ founder has so far identified compromised private keys as the most likely root cause of the exploit.

The team at Harmony Protocol has offered a $1 million bounty for the return of the $100 million in crypto stolen from the hack of its Horizon bridge.

The team at Harmony is also offering the same $1 million bounty for information on how the exploit happened. They also pointed out that ‘no criminal charges’ will be pursued once the funds are returned, as seen in the following tweet by the team.

We commit to a $1M bounty for the return of Horizon bridge funds and sharing exploit information.

Contact us at [email protected] or ETH address 0xd6ddd996b2d5b7db22306654fd548ba2a58693ac.

Harmony will advocate for no criminal charges when funds are returned.

— Harmony 💙 (@harmonyprotocol) June 26, 2022

Crypto Community Suggests $1M is too Low of an Incentive.

However, the $1 million bounty for the return of $100 million in stolen funds has been considered a drop in the ocean by the crypto Twitter community, who believe the offer should be much higher. Below are a few samples of the crypto-twitter community’s response to the $1 million bounty.

Didnt they take about 100 million ? What the hell is 1 million gonna do ? – by @pleasesendmebtc.

I doubt 1m will suffice the hacker, might need to up for and hope they answers and sadly big partial of my funds are in Aave Harmony, oh well – by @0xTusuki.

Really? Only 1M out of 100M? I feel like you gotta offer at least 8M to be taken seriously…- by @0xButthole

Harmony Protocol Founder Identifies Compromised Private Keys as the Probably Cause of the Hack.

In another Twitter thread, Harmony Protocol’s founder and CEO, Stephen Tse, explained that the team had so far not found any evidence that the $100 million exploit was caused by a malicious smart contract.

However, they had identified some evidence that compromised private keys caused it. He explained:

Incident response has found no evidence of smart contract code breach. No evidence of any vulnerability on the Horizon platform was found. Our consensus layer of the Harmony blockchain remains secure.

The team has found evidence that private keys were compromised, leading to the breach of our Horizon bridge. Funds were stolen from the Ethereum side of the bridge.

He also added that the private keys were encrypted and stored by Harmony using a passphrase and a key management system. But somehow, the attacker was able to access and decrypt several of these private keys, which were then used to sign unauthorized transactions, stealing BUSD, USDC, Ethereum, and WBTC from the Horizon bridge.

Mr. Tse also quickly pointed out that investigations into the incident are still ongoing.

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Morgan Creek Digital is Reportedly Planning to Raise $250M to Counter FTX’s BlockFi Bailout Offer

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Morgan Creek Digital is Reportedly Planning to Raise $250M to Counter FTX’s BlockFi Bailout Offer

Summary:

  • Morgan Creek Digital is reportedly looking to raise $250 million to counter FTX’s line of credit to BlockFi.
  • The move resulted from one of FTX’s terms for the credit line to BlockFi, to wipe out shareholders, including Morgan Creek Digital.

Morgan Creek Digital, the hedge fund founded by Mark Yusko, Jason Williams, and Anthony Pompliano, is reportedly looking to raise $250 million to counter FTX’s line of credit to BlockFi.

FTX’s Offer to Lend $250 Million to BlockFi Came With a Catch.

According to a report by Coindesk, Morgan Creek Digitial is rapidly trying to come up with an equity offer to counter that of FTX.

The report explains that according to Mark Yusko, the FTX credit line had a catch in that it would wipe out all BlockFi’s existing shareholders, giving the crypto exchange the option of buying BlockFi ‘at essentially zero price.’ FTX exercising the option would result in all BlockFi’s shareholders, including Morgan Creek Digital, losing all equity in the company.

In addition, Mr. Yusko acknowledged that at the time of the offer, BlockFi’s founders Zac Prince and Flori Marquez had a valid reason to consider it. FTX’s offer was the only one that would not subordinate clients’ assets to a potential rescuer. This means that other offers meant depositors and BlockFi clients would have to wait till the new lender recouped their investments to get back their assets on the platform.

FTX’s BlockFi Deal is Probably Three Days Away from Being Finalized.

Mark Yusko also told investors in a leaked call that the deal between FTX and BlockFI was probably three days away from being sealed. He added:

The only alternative is to raise an equivalent amount in equity and that’s what we’re working on. I would say it’s a 10% possibility but not zero.

Morgan Creek Digital Could Pursue a Joint Deal with FTX for BlockFi.

Also during the leaked call, Mr. Yusko floated the idea of a possible joint deal with FTX with both entities putting up a portion of the capital to ‘bail out’ BlockFi. He said:

I will definitely try to pursue [a joint deal]. Not that I have SBF on speed-dial, but I could probably get that call.

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