The Fall of Genesis, Ethereum Releases ‘Shadow Fork’, What is Proof of Reserve Audit Method+ More

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The Fall of Genesis, Ethereum Releases ‘Shadow Fork’, What is Proof of Reserve Audit Method+ More

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The fall of Genesis:

Genesis, a prominent cryptocurrency lender, has declared bankruptcy, dealing a significant blow to the crypto industry. Genesis is being charged by the SEC for illegal cryptocurrency sales. Genesis is part of the DCG conglomerate, which includes over 200 crypto-focused businesses. Unsurprisingly, the bankruptcy is linked to FTX’s collapse last November amid fraud allegations. This is a warning to the cryptocurrency industry, and it emphasizes the importance of proper regulation and oversight to avoid similar situations in the future.

Genesis, a cryptocurrency lender, declared bankruptcy after being investigated by the US Securities and Exchange Commission. It was charged with illegally selling cryptocurrency. Genesis’ default was linked to the failure of another cryptocurrency firm, FTX. Furthermore, FTX went bankrupt last November amid allegations of fraud. The SEC charges and the bankruptcy of FTX both played a significant role in Genesis’ demise.

Ethereum Releases ‘Shadow Fork’

Blockchain developers have successfully launched a ‘shadow fork’ in the Ethereum blockchain for the upcoming Shanghai upgrade. The shadow fork – a test model for the actual mainnet that allows developers to see if the proposed upgrade’s code works correctly on a real blockchain – occurred Monday at 5:30 a.m. ET.

The Shanghai upgrade will be the first hardfork on Ethereum since the “Merge” in September last year when the blockchain switched from a “proof-of-work” (PoW) to a “proof-of-stake” (PoS) consensus mechanism.

What is Proof of Reserve Audit Method

The FTX crash is one of the crypto industry’s black swan events. Customers were not the only ones who faced increased losses; the industry’s reputation, which was previously known for fraud and scams, was also at stake. However, the FTX’s downward spiral necessitated greater transparency in the crypto industry. One of the solutions proposed by centralized exchanges was to implement Proof of Reserves to instill confidence and save them from damage control.

What is Proof of Reserves

Proof of Reserves is a public attestation that an exchange or crypto custodian publishes the actual underlying assets of assets displayed on their exchange. An independent third-party auditor uses the Merkle tree to conduct the proof of reserve audit. According to several stakeholders, the Merkle tree is a cryptographic data structure used for self-verification and PoR audits. As a result, rather than relying on the exchange or the auditor’s report, users can independently verify.

Users are advised to make informed decisions about where they store their crypto assets because centralized exchanges have a history of fraudulent activities. The FTX collapse is a textbook example of an exchange openly mismanaging user funds and engaging in fraudulent activities. It is difficult to say whether Proof of Reserves could entirely prevent crypto exchanges’ collapse. Nonetheless, it would increase transparency about how the exchange operates and manages user funds. It would instill a sense of accountability in the exchange to conduct their business with integrity.

Venture Capital Deals

  • The blockchain domain is heating up, with new venture capital deals popping up left and right. Here’s a look at some of the most recent deals in the space, including investments in blockchain startups working on everything from payments to data management.
    • Candy Di Gital: Sports-focused non-fungible token (NFT) company.
    • The EasyCompany: Focusing on building a consumer layer for the decentralized web.
    • Quasar Finance: Quasar Finance aims to enable users to create vaults and enable strategies that can deploy assets across multiple blockchains.
    • Open Forest: A carbon neutral blockchain based technology ensures all data is truthful and transparent.
    • Alkimiya: Alkimiya aims to provide hedging solutions for blockspace producers such as miners and staking validators.

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