Macauley Peterson

Nobody loves bridging, even in the best of times. For most crypto users, bridges are a necessary evil to move funds such as stablecoins from chain A to chain B.



NEAR Protocol’s latest contribution, Chain Signatures, which launched on its mainnet today, aims to simplify blockchain interactions by letting apps take actions across multiple blockchain networks through a single Near wallet transaction.



The concept of <a href="https://blockworks.co/tag/account-abstraction">account abstraction</a> is known on other chains. However, on <a href="https://blockworks.co/tag/near">NEAR</a>, it is built into the protocol. “Meta transactions” <a href="https://docs.near.org/concepts/abstraction/meta-transactions">allow</a> any account to relay transactions to other networks by having relayers attach NEAR tokens to cover gas fees and pass the transactions to the external network for execution as if they were sent directly by the user.



This mechanism reduces friction and lowers the barrier to entry for NEAR users engaging with assets native to other chains.



Multichain signatures work via a multi-party computation (MPC) network of NEAR validators, so a user doesn’t need to worry about holding private keys on each chain. Instead, a single account can interact with various chains; rather than trading tokens, users are effectively trading accounts with smart contracts managing the ownership of keys across these chains.



Read more: <a href="https://blockworks.co/news/mpc-wallets-security">MPC wallets have a trade-off. Is it worth it?</a>



In practical terms, NEAR&#8217;s chain abstraction allows for innovative use cases, such as cross-chain DeFi, without the need for traditional bridging mechanisms.&nbsp;



Aurora Labs CEO and co-founder Alex Shevchenko <a href="https://www.youtube.com/watch?v=xERiqWPD6Gk">calls</a> the concept “AccountFi,” as it allows people to “trade accounts on any networks together with all assets and value those accounts have accumulated.”



As there is no minting or burning of assets, the process can be thought of as a one-way bridge through NEAR. For instance, the <a href="https://dev.near.org/bridge">Rainbow Bridge</a>, which connects to the Ethereum Virtual Machine (EVM) on NEAR, verifies the Ethereum state to eliminate the need for reverse operations.



This may have implications for so-called <a href="https://blockworks.co/news/in-search-of-a-discord-alternative-one-protocol-built-its-own">soulbound tokens</a> (SBTs), a form of non-transferrable NFT.



&#8220;Non-transferable assets can be traded and lent, making accounts that do not have assets but have intrinsic value, like those used in farming an airdrop, also liquid,&#8221; Shevchenko said.



Chain signatures thus have the potential to consolidate multiple wallets into one, with relayers handling the user&#8217;s intent as well as the payment of transaction fees across different chains.



Such a system is reliant on the stability of the NEAR protocol and the security of its MPC architecture, and the network has had a generally strong record since its mainnet launch in April 2020. The protocol has undergone numerous upgrades and improvements while historically, NEAR has <a href="https://nearscope.net/">maintained</a> a high level of uptime, alongside a low average block time of approximately 1.12 seconds over the last 20 epochs (10 days).



Chain Signatures currently supports <a href="https://app.blockworksresearch.com/glossary/#elliptic-curve-digital-signature-algorithm-ecdsa">ECDSA</a> chains such as Bitcoin, Ethereum, BNB and Ripple. <a href="https://en.wikipedia.org/wiki/EdDSA">EDDSA</a> chains like Solana and TON are expected to gain support before the end of the year.



Although only a <a href="https://pages.near.org/blog/chain-signatures-mainnet-launches/">handful</a> of applications currently exist that can take advantage of Chain Signatures, Kendall Cole, CEO of Proximity Labs (a contributor to the project) expressed optimism in a statement to Blockworks.



“We&#8217;re excited to see Chain Abstraction in the wild, transforming the way users and developers interact with [DeFi] and [make] it more accessible,” he said.



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Multichain DeFi draws near with Chain Signatures

Jack Kubinec

Telegram has long been the communication platform of choice for crypto-natives, and the encrypted messaging app is lately seeing an influx of crypto-enabled games running within the interface.&nbsp;



Many of the apps offer some kind of in-game currency and promise a forthcoming airdrop, typically on The Open Network (TON) blockchain, which was initially developed by Telegram. Many of these apps are perhaps inspired by Notcoin, which pulled off an airdrop for users of its tap-to-earn game. Newly launched NOT <a href="https://www.coingecko.com/en/coins/notcoin">has</a> a market capitalization of nearly $2 billion, per CoinGecko.



Hamster Kombat has been another Telegram game seeing buzz lately. The app lets users play as a hamster who happens to be the CEO of a crypto exchange. This highly evolved hamster can use in-game currency — earned by tapping one’s screen over and over — to do things like launch margin trading and obtain regulatory licenses.&nbsp;



Read more from our opinion section: <a href="https://blockworks.co/news/traditional-gaming-web3-blockchain">Traditional gaming needs Web3 more than ever</a>



(Unfortunately, there’s no option to funnel customer deposits into risky bets taken by an associated trading firm, but maybe that will come with the next update.)



The NEAR blockchain’s HERE Wallet and associated currency <a href="https://blockworks.co/tag/mining">mining</a> game <a href="https://x.com/ilblackdragon/status/1801274659884712360">saw</a> a notable amount of activity on Base this week.



These apps could all still firmly be in the flash-in-the-pan territory, and whether they can survive past promised <a href="https://blockworks.co/tag/airdrop">airdrops</a> is an open question.



“The next mission for large mini-app games is transforming the initial success into a sustainable business,” Steve Yun, president of the TON Foundation, <a href="https://x.com/steveyun_ton/status/1801633511771935108">said</a> on X.



But that isn’t stopping some investors from piling in. This week, Pixelverse, the developer behind Telegram tap-to-earn game PixelTap, <a href="https://x.com/pixelverse_xyz/status/1800925195626062039">announced</a> a $5.5 million raise with investors including Delphi Ventures and Foresight Ventures.



<h2 class="wp-block-heading">PleasrDAO serves Shkreli</h2>



PleasrDAO filed a suit against Martin Shkreli for getting on X spaces and playing the Wu-Tang Clan’s “Once Upon a Time in Shaolin” — an unreleased album that Shkreli once owned but sold to the DAO in 2021.&nbsp;



Shkreli was forced to forfeit the album, of which Wu-Tang only made one copy, as part of a court order stemming from his fraud conviction over raising the price of life-saving medications. He apparently made copies of the work and played it on an X space in retaliation for being blocked by the DAO.&nbsp;



PleasrDAO clapped back with a screenshot of the <a href="https://x.com/PleasrDAO/status/1800567671672746410">lawsuit</a>. The suit, filed in the Eastern District of New York, asks for Shkreli to give up his copies of the album and for monetary damages, among other things.&nbsp;



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul class="wp-block-list">
<li>Despite all the hullabaloo, Iggy Azalea’s MOTHER memecoin <a href="https://www.coingecko.com/en/coins/mother-iggy">slid</a> 23.5% this week, according to CoinGecko.</li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul class="wp-block-list">
<li>Two former contributors to the popular crypto governance platform Snapshot Labs have helped <a href="https://mirror.xyz/0x8FA6332135B57b32200e1FbD30371a2F44D946Bf/OlDkVWaXzzJS6yLMOjbMEeSxUOapWOCj3Aq4WplcZZk">launch</a> SODA, a company focused on “custom merchandise and organization culture in the Ethereum ecosystem.”</li>



<li>An indie documentary about CryptoPunks <a href="https://x.com/WTP_Movie/status/1800945457826283949">debuted</a> this week.</li>



<li>McDonald’s Singapore <a href="https://x.com/BandwagonLabs/status/1798555064065466622">joined</a> a metaverse initiative.</li>
</ul>



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Web3 Watch: Telegram tap-to-earn is the new crypto gaming trend

Bessie Liu

Swiss non-profit organization NEAR Foundation has launched “Chain Signatures,” enabling users to sign transactions on supported blockchains from a single NEAR account. 



Chain Signatures enables accounts and smart contracts on NEAR to sign transactions for different chains. At launch, this will include Bitcoin, Ethereum and Cosmos network chains, as well as DogeCoin and XRP Ledger. It will soon support Solana, TON Network and Polkadot, according to the team.



By enabling Chain signatures, DeFi protocols can utilize assets from other chains without requiring a cross-chain bridge. This is possible because Chain Signatures are designed to be account-based rather than bridge-based.



Read more: <a href="https://blockworks.co/news/near-foundation-top-level-domain">NEAR Foundation applies for .near top-level domain</a>



According to Kendall Cole, director of research and development company Proximity Labs — which supports projects on NEAR and Aurora — Chain Signatures can potentially unlock new use cases for DeFi protocols.



“Users can use XRP as collateral to borrow USDC, or trade DOGE for SOL. This is particularly innovative for non-smart-contract chains like Bitcoin, DogeCoin and Ripple because none of the major bridges support these chains today,” Cole said.



NEAR protocol documents <a href="https://docs.near.org/concepts/abstraction/chain-signatures">show</a> that Chain Signatures link NEAR account addresses to other blockchains <a href="https://eprint.iacr.org/2021/1330">using</a> an Additive Key Derivation. This mechanism enables the single master key to be derived into multiple subkeys. 



When a user wants to transact between different blockchains, a deployed multichain smart contract will make a signature request for the transaction on the target blockchain network, and a Multi-Party Computation (MPC) service will sign the transaction.&nbsp;



Read more: <a href="https://blockworks.co/news/mpc-wallets-security">MPC wallets have a trade-off. Is it worth it?</a>



Once the signature is obtained, the smart contract will return it to the user, allowing the user to send the signed transaction to execute it on the target blockchain.&nbsp;



“Smart contracts on NEAR will be able to custody assets on any chain (since they can sign transactions on any chain via chain signatures), and maintain user balances similar to how single chain lending protocols or <a href="https://blockworks.co/tag/dexs">DEXs</a> do now,” Cole explained. 



The Chain Signatures MPC network will be launched in partnership with <a href="https://blockworks.co/tag/eigenlayer">EigenLayer</a>, which will secure the network <a href="https://blockworks.co/news/eigenlayer-flips-aave-tvl">using its restaked ETH</a>. At launch, there will be ten node providers, including a handful of Actively Validated Services (AVS) infrastructure providers.&nbsp;



“Post-launch, EigenLayer will be used to provide economic security to the network and transition the MPC network to a permissionless version. To participate in the MPC network, prospective node operators will need to re-stake their ETH and will be penalized if they maliciously authorize any transactions that did not originate from a NEAR account,” Cole explained.



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NEAR launches tool for signing transactions on Bitcoin, Ethereum and more

Non-profit organization NEAR Foundation, the team behind the NEAR protocol, will partner with D3 Global, an interoperable domain name company, to apply for a .near top-level domain (TLD) in the upcoming ICANN application window.



A TLD is the highest level in the hierarchy of root-level domains. Some of the most generic TLDs include .com, .net and .org, for example.&nbsp;



ICANN applicants must meet specific requirements before they are eligible to apply, like having relevant operational, technical and financial capabilities to ensure that the company can successfully operate a TLD. There is a nonrefundable fee that totals up to over $270,000 and an additional accreditation fee of <a href="https://www.icann.org/resources/pages/registrar-fees-2018-08-10-en#:~:text=The%20annual%20accreditation%20fee%20for,installments%20of%20US%241%2C000.00%20each." target="_blank" rel="noreferrer noopener">$1,000 per quarter</a> for successful applicants.



Fred Hsu, co-founder and CEO of D3 told Blockworks that the D3 team has decades of experience operating TLDs and navigating the application process.&nbsp;



&#8220;We have an incredibly distinguished staff with deep registry-level expertise, process know-how, and key industry relationships that have allowed us to successfully register and/or manage more than 300 TLDs that were approved in the prior application round. Many of these TLDs have grown to substantial scale today including .xyz, .inc, and more,” Hsu said.



If <a href="https://blockworks.co/tag/near">NEAR</a> Foundation successfully obtains the TLD, it can use a single domain on its website, email and wallet addresses. The TLD can also serve as verification credentials across different platforms, enabling developers to develop <a href="https://blockworks.co/tag/dapps">dapps</a> that tap into existing internet infrastructure.



Read more: <a href="https://blockworks.co/news/crypto-infrastructure-lacking-apps">The crypto infrastructure is here, but where are the apps?</a>



&#8220;We&#8217;re excited to work with D3 to secure the .near top-level domain and extend the power of NEAR accounts across the entire internet. Illia Polosukhin, the co-founder of NEAR Protocol, said in a press release reviewed by Blockworks.



Polosukhin added, “as the functionality of NEAR accounts expands with Chain Abstraction, combining Web3 <a href="https://blockworks.co/tag/identity">identity</a> with existing internet infrastructure will help drive mainstream adoption.”



NEAR Foundation is not the first team to have made moves in the domain space in hopes of <a href="https://blockworks.co/news/farcaster-blockchain-onboarding">connecting Web3 and Web2</a>.&nbsp;



Most recently, Ethereum Name Service (<a href="https://blockworks.co/tag/ens">ENS</a>), an <a href="https://blockworks.co/tag/ethereum">Ethereum</a> domain naming service, teamed up with GoDaddy, a popular domain registrar, to link wallets to web pages.



Read More: <a href="https://blockworks.co/news/ethereum-name-service-godaddy-partnership">ENS partners with GoDaddy to enable users to link wallets to domains</a>



By integrating with one of the largest web hosting providers in the world, users will be able to easily connect their simplified ENS wallet addresses with their Domain Name Systems.



Updated Feb. 8, 2024 at 4:08 pm ET: Updated ICANN applicant fee information.



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NEAR Foundation applies for .near top-level domain

Growth emerged as a major hiring priority this week.



The Uniswap Foundation, a non-profit aiming to grow the Uniswap protocol, hired Bita Abolfathi as a growth manager. The hire was <a href="https://app.uniswap.org/vote/2/51">greenlit</a> as part of the proposal for the Uniswap Foundation’s $46 million grant from the Uniswap DAO.&nbsp;



Abolfathi told Blockworks that as someone who dropped out of college, she appreciates the Uniswap Foundation’s willingness to disburse grants to deserving builders regardless of credentials.



“I was drawn to the Uniswap Foundation because they recognize that advancing <a href="https://blockworks.co/tag/defi">DeFi&#8217;s</a> impact on the world requires robust support — both intellectual and financial — for the most talented individuals and teams, irrespective of their backgrounds,” Abolfathi said.



Read more: <a href="https://blockworks.co/news/uniswap-grant-dao-vote">Uniswap DAO grants $46.2M to Uniswap Foundation</a>



Abolfathi previously worked at Gauntlet and SCRIB3. She becomes Uniswap Foundation’s second growth-focused employee, joining head of growth Raphaela Sapire.&nbsp;



Elsewhere, the stablecoin project Ethena Labs hired former Lido business developer Seraphim Czecker as its head of growth.&nbsp;



Ethena generates yield on its USDe stablecoin with collateral backing in Lido stETH and short ether futures. The company <a href="https://x.com/ethena_labs/status/1681592637537816578?s=20">raised</a> a $6.5 million seed round in June led by Dragonfly. Czecker expressed belief in the project’s ability to scale in a direct message to Blockworks.



Since Ethena “derives yield from staking and shorting perp futures,” Czecker said, “in a bull market we are talking 15-20% organic APY on a stablecoin with a very reasonable risk profile.”



Czecker will be part time until 2024, he <a href="https://x.com/MacroMate8/status/1722580151194558864?s=20">said</a> in a post announcing the role. This is Czecker’s third crypto role this year, after resigning from Euler Labs in April and from Lido Finance last week. His LinkedIn bio reads, “Head of Taking Risk.”



<h2 class="wp-block-heading">NEAR co-founder becomes foundation’s CEO</h2>



NEAR Protocol co-founder Illia Polosukhin was tapped as CEO of the NEAR Foundation, a non-profit tasked with growing the NEAR ecosystem.



Polosukhin follows Marieke Flament, who <a href="https://near.org/blog/the-continued-evolution-of-the-near-foundation">stepped</a> down as NEAR Foundation’s CEO after two years at the helm.&nbsp;



Chris Donovan, NEAR’s general counsel who was initially announced as Flament’s replacement, will <a href="https://near.org/blog/enter-the-black-dragon-near-co-founder-joins-the-near-foundation-as-ceo">become</a> the foundation’s chief operating officer.



The move was announced on the first day of the protocol’s NEARCON convention in Lisbon. Polosukhin took up the role during an eventful week for NEAR as it announced the forthcoming <a href="https://blockworks.co/news/polygon-developers-zk-proofs">launch of zero-knowledge proofs for WASM blockchains</a> with Polygon.



<h2 class="wp-block-heading">Other notable hiring news</h2>



<ul class="wp-block-list">
<li>UAE crypto exchange Bybit <a href="https://blog.bybit.com/post/bybit-welcomes-sebastian-gawenda-as-options-business-leader-bltfef17f6f1340ab6c/">hired</a> Sebastian Gawenda to lead its options business. Gawenda previously worked at Crypto.com and Kraken.</li>



<li>Ava Labs, the company behind the Avalanche blockchain, laid off some of its staff, CEO Emin Gün Sirer <a href="https://x.com/el33th4xor/status/1721684964389900415?s=20">announced</a>. The exact number of layoffs were not disclosed, but Ava Labs’ VP of growth <a href="https://x.com/0xHushky/status/1721638366788325457?s=20">wrote</a> that “many people” on the marketing team were let go.</li>
</ul>



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Crypto hiring: Projects stock up on growth roles

Polygon Labs has partnered with the NEAR Foundation to bring zero-knowledge (zk) proving to WebAssembly (WASM) blockchains, the teams announced at NEARCON in Lisbon today.&nbsp;



This means that developers who build with Polygon’s Chain Development Kit (CDK), an open-source codebase, will soon be able to use zkWASM as a prover.



In ZK technology, a prover refers to the party trying to show a claim is accurate to a verifier without revealing the information itself. A verifier is responsible for acknowledging that the information is accurate.



Having a zkWASM prover will enable NEAR layer-1 validators to simplify their proving process, as they will no longer need to work on verifying individual shards — independent unique states of transactions and smart contracts on blockchains.



The addition opens the way for developers to work in programming languages other than Solidity, according to a Polygon spokesperson. That should help with onboarding new developers into Web3.



Read more: <a href="https://blockworks.co/news/ethereum-rollup-zksharding-nil-mainnet">New Ethereum rollup takes a zero-knowledge approach to sharding</a>



<a href="https://blockworks.co/tag/near">NEAR</a> is a decentralized cloud computing platform for sharded architecture. This move will bring the NEAR protocol closer in alignment with <a href="https://blockworks.co/tag/ethereum">Ethereum</a>, enabling its WASM chains to tap into liquidity on Ethereum, Sandeep Nailwal, co-founder of Polygon said in a statement.



It will also add another layer of customizability to developers using Polygon’s CDK, Nailwal notes.&nbsp;



“Projects will be able to select from a number of provers when building with CDK, whether that’s launching or migrating an <a href="https://blockworks.co/tag/evm">EVM</a> chain, or building a WASM chain,” he said.&nbsp;



An interoperability layer is also in the works and will connect WASM chains on NEAR to chains deployed using Polygon’s CDK. Alongside a shared bridge between CDK chains, these networks can access to Ethereum liquidity without breaking composability.



“The shared expertise of NEAR and <a href="https://blockworks.co/tag/polygon">Polygon</a> will expand the zk landscape and defragment liquidity across chains,” Illia Polosukhin, co-founder of NEAR Protocol said. “Creating and using the zkWASM prover will also improve the scalability and decentralization of the NEAR layer-1.”



The zkWASM prover is expected to launch next year, alongside other provers in the CDK, each with its own advantages.



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Polygon and Near are bringing zkWASM to life

Wintermute founder and CEO Evgeny Gaevoy has publicly accused Near Foundation and Aurora Labs for failing to uphold a deal which would see $11.2 million worth of USN, a Near protocol-native stablecoin, convert to USDT.



Gaevoy said Wintermute, which acquired the USN tokens from the <a href="https://blockworks.co/tag/alameda-research">Alameda Research</a> estate, made a deal to participate in the redemption under the preexisting <a href="https://pages.near.org/blog/statement-in-full-near-foundation-to-fund-usn-protection-programme/">USN Protection Program</a> (USNPP) designed by Near Foundation after the developer Decentral Bank <a href="https://blockworks.co/news/near-nixes-algorithmic-stablecoin-usn">decided to sunset the stablecoin</a> in October 2022.



Aurora Labs was responsible for setting up the program after receiving a grant from the Near Foundation.&nbsp;



According to Gaevoy in a <a href="https://twitter.com/EvgenyGaevoy/status/1722019058717986903">post on X</a>, Wintermute was tasked with facilitating the selling of an estimated 11.2 million in USN to FTX creditors under the assumption that they would later be able to redeem USN for USDT on a 1-1 basis.&nbsp;



“This confidence was based on public statements by NF, Near introducing us to Aurora and Aurora confirming in private chats that they can facilitate the redemption, in our specific case, in a couple of days,” Gaevoy <a href="https://twitter.com/EvgenyGaevoy/status/1722019058717986903">wrote</a>.&nbsp;



Aurora responded with a <a href="https://aurora.dev/blog/our-response-to-wintermute-s-claim">blog post</a> calling the claims “unfounded,” and asserting that Wintermute “tried to use the USN Protection Programme (USNPP) in a way that ran counter to its purpose and the terms of use.”



Gaevoy claimed that <a href="https://blockworks.co/tag/near-foundation">Near Foundation</a> did not honor commitments made, and the team was only offered 20% of the amount they were initially promised.



Aurora rebutted the claim, saying “[Wintermute’s] redemption request was inconsistent with the intended purpose of the USNPP,” and therefore declining the request, a decision made in consultation with the Near Foundation, was legitimate.



Gaevoy further noted that Wintermute offered alternative solutions, such as using the funds to buy and lock <a href="https://blockworks.co/tag/near">Near</a> tokens (<a href="https://blockworks.co/price/near">NEAR</a>), but received no cooperation from the Near Foundation team.



“The resulting loss would have been easy to sweep under the rug. Nevertheless, I made a decision to disclose this in the public interest, because I strongly believe it is my role to act in the best interests of the industry beyond the immediate commercial interest at hand,” Gaevoy wrote.



Near Foundation has not responded to Blockworks request for comment at time of publication. On Tuesday, coinciding with the start of the NEARCON conference in Lisbon, the foundation <a href="https://near.org/blog/enter-the-black-dragon-near-co-founder-joins-the-near-foundation-as-ceo">announced</a> that Near co-founder was appointed as CEO. He previously <a href="https://near.org/blog/illia-polosukhin-returns-to-near-foundation-council-to-continue-evolution-of-near-ecosystem-diogo-monica-founder-of-anchorage-joins-as-chairman">re-joined</a> the Near Foundation Council in October.



Gaevoy said that Wintermute will be pursuing legal action against both teams and that Wintermute is “fully committed to switching into a full-time adversarial mode.”



According to Gaevoy, Wintermute has no trading position on NEAR, however the NEAR token is down about 3% over the past 24 hours.



“Entering into a short position, though potentially worth the effort, would significantly dilute the overall message,” he <a href="https://x.com/EvgenyGaevoy/status/1722019542220607602?s=20">said</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Wintermute CEO accused Near Foundation of failing to redeem stablecoins

Shalini Nagarajan

<div id="highlights-block_6357b63652665" class="highlights">
 <ul>
 <li>USN became “susceptible to undercollateralization during extreme market conditions,” NEAR said</li>
 <li>The situation will make it hard for projects to maintain long-term interest in their algorithmic stablecoins, a crypto exec said</li>
 </ul>
 
</div>



NEAR Protocol is attempting to avoid another <a href="https://cms.blockworks.co/tag/terra" target="_blank" rel="noreferrer noopener">Terra-like</a> situation.



The protocol’s native stablecoin USN, which had a trading volume of <a href="https://www.coingecko.com/en/coins/usn" target="_blank" rel="noreferrer noopener">$9.7 million</a> in the last 24 hours, is gradually winding down due to risks of undercollateralization, <a href="https://near.org/blog/statement-in-full-near-foundation-to-fund-usn-protection-programme/" target="_blank" rel="noreferrer noopener">NEAR</a> said in a statement on Monday.



NEAR is a blockchain project that seeks to rival layer-1 protocols including Solana and Ethereum. It launched its own algorithmic stablecoin, issued by Decentral Bank (DCB), in April.



But after the stunning <a href="https://cms.blockworks.co/cryptocurrency-luna-lurches-as-terra-usd-volatility-continues-erasing-billions/" target="_blank" rel="noreferrer noopener">collapse</a> of Terraform Labs’ stablecoin TerraUSD (UST) in May, which wiped out more than $200 billion in the space, NEAR’s native-stable coin was made to transition to a non-algorithmic version backed by Tether (USDT) tokens, owing to potential risks.



Since USN was originally an algorithmic stablecoin, it became prone to undercollateralization during extreme market conditions, according to Decentral Bank. A separate double-minting issue also contributed to the undercollateralization, meaning there wasn’t sufficient collateral to back the token.



<h3 class="wp-block-heading">NEAR to use $40 million to protect investors affected by USN shutdown</h3>



The NEAR Foundation pegged the known collateral gap at $40 million, saying the imbalance “cannot expand further assuming DCB burns/destroys all the double-minted USN and promptly winds down the project in an orderly manner.”



It clarified that the gap is not associated with its native token NEAR, which provides utility within the protocol, and set aside $40 million in fiat currency to fund a “USN Protection Programme.”



<h3 class="wp-block-heading">Rough times for algorithmic stablecoins</h3>



Most stablecoins are backed by an asset like fiat currency or physical assets like gold. But algorithmic stablecoins aren’t backed by external assets, rather they rely on specific instructions to help the coin maintain its peg. Similarly, UST was not backed by the US dollar, instead using financial engineering with sister token LUNA to maintain its links to the dollar.



Jamie Thomson, CEO of NFT gaming studio Vulcan Forged, pointed out the disadvantages of algorithmic stablecoins: the lack of real asset backing means price stability isn’t guaranteed.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“People were skeptical of algorithmic stablecoins after TerraUSD crashed, but now that NEAR protocol has closed its stablecoin, they have more evidence,” he told Blockworks via email.&nbsp;</blockquote>



“Where there are market movements traders could get profits, but it’s clear it will be now even harder for projects to maintain long-term interest in their algorithmic stablecoins,” Thomson added.



Although the NEAR Foundation believes its collateral gap can be contained, concerns over the future of stablecoins remain.&nbsp;



NEAR Foundation didn’t return Blockworks’ request for comment by press time.



Even one sign of weakness or a systemic issue is enough for a large-scale loss of trust, according to Simon Schaber, the chief business development officer at Spool.



Despite concerns over their critical characteristics, <a href="https://cms.blockworks.co/?s=beanstalk" target="_blank" rel="noreferrer noopener">Beanstalk</a> is among the algorithmic stablecoins still standing. The Ethereum-based stablecoin protocol suffered a $180 million exploit in April, but <a href="https://cms.blockworks.co/algo-stablecoin-protocol-beanstalk-relaunches-following-180m-hack/" target="_blank" rel="noreferrer noopener">resumed services</a> four months later. 



&#8220;Beanstalk uses a different mechanism than USN to create price stability. Bean, the stablecoin issued by Beanstalk, is backed by credit rather than any form of collateral,&#8221; a spokesperson told Blockworks.



This report was updated on Oct. 26 at 8:33 am ET to include Beanstalk&#8217;s comment.



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NEAR Nixes Algorithmic Stablecoin USN

Sebastian Sinclair

<div id="highlights-block_62a15abbfdb66" class="highlights">
 <ul>
 <li>The DEX protocol is looking to bootstrap liquidity for budding decentralized applications built on the NEAR blockchain</li>
 <li>Capital will go toward hiring efforts, product development, partnerships and growth of its ecosystem, Orderly said</li>
 </ul>
 
</div>



Orderly Network, a permissionless, decentralized exchange protocol built on the NEAR blockchain, has picked up $20 million in a seed funding round from some of the industry&#8217;s top venture capitalists.



Three Arrows Capital, Pantera Capital, Dragonfly Capital, Sequoia China, Jump Crypto, Alameda Research and GSR Ventures co-led the round, betting that the protocol can enhance the crypto trading experience.



Funding will go toward the protocol&#8217;s recruitment efforts as well as the development of new and existing products, Orderly said in a statement Thursday. Capital will also be allocated to drive partnerships and grow its ecosystem.



Orderly Network uses a decentralized on-chain order book to provide liquidity and lets traders execute orders directly utilizing smart contracts while providing desired flexibility with order sizes and pricing. Its platform features a risk engine, matching engine and shared asset pools for decentralized applications (dApps) to build on top of in a modular fashion.



Orderly&#8217;s composability, the protocol&#8217;s developers said, will let developers build dApps for financial instruments such as derivatives, spot and margin trading as well as lending and borrowing.



&#8220;For a chain to accommodate applications seeking mass adoption, they need ready access to liquidity,&#8221; Woo Network&#8217;s head of marketing and growth Ben Yorke told Blockworks.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;Orderly advances this concept by being able to backstop institutional liquidity including spot, margin, and derivatives, with an order book matching engine that can accommodate high throughput and rate limits.&#8221;</blockquote>



Founded in October last year, the project is the incubation lovechild of NEAR and the WOO Network — a liquidity provider connecting traders, exchanges and institutions. The project plans to integrate with existing bridges to provide deposits and withdrawals from most layer-1 blockchains.



DEX (decentralized exchange) volumes are down sharply so far in June and have been generally on the decline since the market peak in November 2021, according to <a href="https://defiprime.com/dex-volume" target="_blank" rel="noreferrer noopener">data from Dune Analytics</a>. Automated market maker-based DEX Uniswap continues to dominate, claiming more than half of all trading volume.



Order book trading interfaces built on top of automated market maker liquidity pools are a relatively new concept in the industry.



&#8220;Infrastructure being built for traders by traders — results in better products that are designed to meet the specific needs and provide the best possible trading experience,&#8221; Three Arrows Capital co-founder Kyle Davies said. &#8220;Pairing this product-first ethos with best-in-class liquidity options and a team with a proven track record, we believe that Orderly is primed for success.&#8221;



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DEX Protocol Orderly Network Nabs $20M To Further DApps on NEAR

<div id="highlights-block_629fb10800a8f" class="highlights">
 <ul>
 <li>No user funds were lost or stolen before the loophole was discovered</li>
 <li>Up to $200 million worth of Aurora users’ funds could have been hacked if this bug wasn’t fixed</li>
 </ul>
 
</div>



It was almost the next market-moving DeFi hack.&nbsp;



Aurora, an Ethereum Virtual machine built on the NEAR Protocol, recently paid a $6 million reward to a so-called white hat hacker for identifying a key bug. 



The hacker, known as pwning.eth, uncovered in April a critical vulnerability in Aurora’s system, which could have jeopardized up to $200 million of funds. Virtual machines power smart contracts, or transactions executed in code on the blockchain without intermediaries, on Ethereum. Aurora paid the bounty through the Immunefi platform. 



It marks one of the largest-ever known bounty payouts in DeFi (decentralized finance) history. Last month, crypto bridge Wormhole — which connects different blockchains — <a href="https://www.theblockcrypto.com/post/148085/wormhole-announces-10-million-bug-bounty-payout" target="_blank" rel="noreferrer noopener">paid</a> $10 million to an ethical security hacker that also discovered a bug through Immunefi’s platform.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Such a vulnerability should have been discovered at an earlier stage of the [defense] pipeline and we have already started improving our methods to achieve that in the future,” Frank Braun, Aurora’s head of security, said in a statement Tuesday. </blockquote>



Added Braun: “However this event ultimately proves that our security mechanisms work.”



The bug was initially flagged via Immunefi — crucially, before any funds were stolen. <a href="https://immunefi.com/bounty/aurora/" target="_blank" rel="noreferrer noopener">Aurora&#8217;s bounty program</a> with Immunefi was launched in April 2022, with rewards ranging from $1,000 to $6 million, depending on severity. 



Jonah Michaels, a spokesperson for Immunefi, told Blockworks that at “a time of distrust in the markets, it’s important more than ever for Web3 projects to show that they take security seriously.”



On Immunefi’s platform, security researchers review code and disclose vulnerabilities. Through its programs with DeFi projects, Immunefi said it paid over $40 million in bounties to friendly hackers — claiming to have prevented over $20 billion in potential damages.



Aurora’s goal is to provide application developers the means to operate on Ethereum-compatible platforms under the governance of the decentralized Aurora DAO. Aurora’s scaling solution is currently responsible for $373 million of NEAR’s $786 million in total value locked, <a href="https://defillama.com/chain/Aurora?currency=USD" target="_blank" rel="noreferrer noopener">according to data provider DefiLlama</a>.



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$6M Bounty Paid to White Hat Hacker Likely Averts Sizable DeFi Hack

On today&#8217;s episode of &#8220;<a href="https://youtu.be/11Jlj_qplew" target="_blank" rel="noreferrer noopener">Empire</a>,&#8221; Jason Yanowitz and Santiago Roel Santos are joined by Illia Polosukhin, co-founder of NEAR, one of the fastest-growing layer-1 blockchains that focuses on the user and developer experience. Illia believes NEAR&#8217;s culture, simplicity and dynamic scalability will onboard the next billion users to crypto. 



Don&#8217;t miss this discussion on NEAR&#8217;s roadmap and the layer-1 landscape. This podcast was recorded the day before NEAR announced its latest <a href="https://cms.blockworks.co/near-raises-350m-to-bring-market-cap-over-10b/" target="_blank" rel="noreferrer noopener">$350 million raise</a> led by Tiger Capital, just three months after Three Arrows Capital led a <a href="https://cms.blockworks.co/near-token-spikes-after-protocol-raises-150m-led-by-three-arrows-capital/" target="_blank" rel="noreferrer noopener">$150 million</a> raise for the blockchain.



Plus, hear more on:



<ul class="wp-block-list"><li>scalability solutions</li><li>crypto aid</li><li>sharding</li><li>multichain and bridges</li><li>and so much more!</li></ul>



Check out what they had to say in the video below.👇



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="NEAR, The Dark Horse of the L1 Wars? | Illia Polosukhin, NEAR" width="1024" height="576" src="https://www.youtube.com/embed/11Jlj_qplew?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen></iframe>
</div></figure>



<h3 class="wp-block-heading">About the show</h3>



&#8220;Empire&#8221; is a twice-a-week show. On Thursdays, Jason interviews crypto industry movers and shakers to talk about their struggles, bold moves and tough decisions. Friday&#8217;s weekly roundup episodes feature <meta charset="utf-8">co-host Santiago Roel Santos and cover the top news from the past week.



For any NPR or Guy Raz fans out there, you can think of &#8220;Empire&#8221; as a &#8220;How I Built This&#8221; for the bitcoin and crypto industry.



Subscribe to &#8220;Empire&#8221; today on&nbsp;<a href="https://podcasts.apple.com/us/podcast/empire/id1554930038" target="_blank" rel="noreferrer noopener">Apple</a>&nbsp;or&nbsp;<a href="https://open.spotify.com/show/4UTePv1CR3APdKOiosR3Iq" target="_blank" rel="noreferrer noopener">Spotify</a>. Watch episodes on&nbsp;<a href="https://www.youtube.com/playlist?list=PLvER9nHSRN3wPkrDGTT5_8VC4Hjcq0f9U" target="_blank" rel="noreferrer noopener">YouTube</a>.



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a target="_blank" href="https://cms.blockworks.co/newsletter/?source=end" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator"/>

Podcast: NEAR, the Dark Horse of the L1 Wars? | Illia Polosukhin

Casey Wagner

<div id="highlights-block_624dc87784979" class="highlights">
 <ul>
 <li>NEAR protocol announced its second fundraise since January</li>
 <li>The capital will be used to expand regional hubs around the world, the protocol said</li>
 </ul>
 
</div>



Blockchain project NEAR Protocol has announced the close of another funding round.



Just three months after its <a href="https://cms.blockworks.co/near-token-spikes-after-protocol-raises-150m-led-by-three-arrows-capital/" target="_blank" rel="noreferrer noopener">$150 million raise</a>, NEAR announced an additional $350 million capital raise Wednesday, bringing its market cap to more than <a href="https://www.coingecko.com/en/coins/near" target="_blank" rel="noreferrer noopener">$10 billion</a> as of Wednesday.



The funding round, led by Tiger Global, will be put toward growing regional hubs in key community centers across the globe, according to a statement.



“NEAR is poised to be a leading smart contract blockchain platform, combining first-rate technology with a fast-growing developer ecosystem,” partner at Tiger Global John Curtius said in a statement.



The protocol has established communities in Asia, Africa and Europe, and it aims to expand support in emerging communities in Latin America, Turkey and India, the company said.



Since its mainnet launch in late 2020, the NEAR network has processed over 70 million transactions and supported over 2.3 million accounts. Its Ethereum-compatible <a href="https://aurora.dev/" target="_blank" rel="noreferrer noopener">Aurora</a> scaling solution is responsible for $800 million of Near’s $1.1 billion in total value locked (TVL), <a href="https://defillama.com/chain/Aurora" target="_blank" rel="noreferrer noopener">according to DefiLlama</a>.



After its January raise, the protocol’s native token, NEAR, jumped nearly 10% to trade just under $20 before falling to around $15 in recent weeks. It was trading down about 3% Wednesday afternoon.



NEAR, which seeks to rival layer-1 protocols including Solana and Ethereum and claims to be the first truly <a href="https://www.investopedia.com/terms/s/sharding.asp" target="_blank" rel="noreferrer noopener">sharded</a> network in the world, also recently <a href="https://near.org/blog/near-in-march-unchain-fund-sailgp-and-daos/" target="_blank" rel="noreferrer noopener">announced</a> a series of decentralized autonomous organization (DAO) partnerships, including being selected by Orange DAO as its preferred layer-1 blockchain for Web3.



“We are thrilled to have been selected by some of the brightest minds in the world as the preferred layer-1 chain on which Orange DAO members will want to build,” Marieke Flament, CEO of the NEAR Foundation, said in a statement. “We know that community-driven innovation benefits everyone, and this partnership is simply another example of our mission in practice.”



Illia Polosukhin, NEAR’s Ukrainian co-founder, is also a key player in the cryptocurrency community working to help efforts in Ukraine. He has helped evacuate at least 50 people out of Ukraine and raised more than $3 million, according to a <a href="https://www.bloomberg.com/news/articles/2022-03-09/ukraine-s-crypto-community-sends-donation-support-after-russia-invasion" target="_blank" rel="noreferrer noopener">Bloomberg</a> report.



Other investors in the latest round include FTX Ventures, Dragonfly Capital and Blockchain Ventures.



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NEAR Raises $350M To Bring Market Cap Over $10B

Michael Bodley

<div id="highlights-block_62212f46e2aa9" class="highlights">
 <ul>
 <li>The launch bucks the trend of generalist crypto venture capital startups</li>
 <li>The fund’s portfolio manager previously spent time at firms ConsenSys Ventures and Google</li>
 </ul>
 
</div>



As cryptocurrency-focused portfolio managers look to narrow their niches in a sweep toward specialization, a ConsenSys Ventures alum is prepping a venture capital fund fund launch focused on just one protocol.



Rune Bentien told Blockworks he expects to hold a first capital close of between $10 million to $15 million for his United Kingdom-based MOVE in late March or early April. The plan is to raise about $40 million overall, pending a couple of additional closes later this year.&nbsp;



MOVE backs exclusively startups in the NEAR Protocol ecosystem, a decentralized finance blockchain that aims to harness a network of computers to create a cloud computing platform.



The NEAR token was trading at a little over $11 midday Thursday, a 165.6% increase from a year ago. Investors have been drawn to the proof-of-stake blockchain’s use of sharding, which splits the blockchain’s data into easily digestible pieces divided among the network’s nodes that validate transactions.



Bentien and other institutional investors deploying capital to NEAR projects say the blockchain is still in its early days and has a solid growth trajectory ahead.



“This is still so early,” Bentien said.”You have less than 30,000 full-time developers on Web3.”



The launch is one of a <a href="https://cms.blockworks.co/anon-cryptopunk-owner-launches-nft-fund-betting-on-ability-over-identity/" target="_blank" rel="noreferrer noopener">growing</a> <a href="https://cms.blockworks.co/miami-family-office-backing-nft-fund-launch-helmed-by-fine-art-collector/" target="_blank" rel="noreferrer noopener">number</a> of new vehicles keying in on a single corner of crypto  as limited partners increasingly look for specialization as a means to generate alpha.



A couple of years ago, industry participants say, crypto’s market cap was low enough that focusing on one niche wasn’t a viable way to deploy significant capital. That’s changing.



The NEAR team, Bentien said, has a “huge technical advantage” over other blockchains with its sharding technology and has been drawing the interest of institutional investors looking for the next big thing. Adding to the appeal: The cryptocurrency says it’s carbon neutral.



Bentien, who ran one of the first 50 nodes on NEAR, said the blockchain is primed for widespread adoption.



“Assuming they can stay focused in 2022, I think we have an exciting few years ahead of us,” Bentien said.



The startup plans to deploy capital “as early as possible,” Rune said, concentrating on pre-seed, seed and Series A investment rounds. He expects many of the investments to back startups developing decentralized applications on the NEAR blockchain.&nbsp;



The team is now warehousing five to 10 investments that will become part of its portfolio once the fund launches. To start, MOVE plans to put about two-thirds of its capital into equity plays, with the remaining third earmarked for token investments. That proportion is expected to flip over the next year or two.



MOVE plans to have five staffers, including some from crypto-native backgrounds, on board around its launch. They’re based in Africa, Europe and the US. Bentien declined to disclose their identities because some are still negotiating exits with current employers.



The startup also has one venture partner on board.



The team will take the helm of a fund with a five-year lockup period — a shorter duration than a good number of other venture capital funds — and plans to take limited partner contributions in the form of cryptocurrencies, including NEAR.



Fiat will not be accepted for limited partner contributions, a potential barrier to entry for traditional investors accustomed to conducting all their financial dealings in dollars — though support for commonly used stablecoins, such as USDC, could help.&nbsp;



Before working for ConsenSys, Bentien spent nearly nine years in business development roles at Google. He has also worked for a number of startups.



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New Crypto Venture Capital Fund Investing Only in NEAR in Nod to Specialization

Jacquelyn Melinek

<div id="highlights-block_61e05d2bfdd35" class="highlights">
 <ul>
 <li>In the past 24 hours, the NEAR cryptocurrency jumped 9.84%, or $1.72, to $19.36</li>
 <li>The funding will be used to accelerate its mission of helping people learn, use and adopt Web3 technologies</li>
 </ul>
 
</div>



NEAR Protocol has closed a $150 million capital raise led by Three Arrows Capital, the team shared in a blog post on Thursday.&nbsp;



The funding will be used to accelerate its mission of helping people learn, use and adopt Web3 technologies. The protocol has established communities in Asia, Africa and Europe, and is aiming to expand support in emerging communities in Latin America, Turkey and India, according to the blog.&nbsp;



“We are looking forward to leveraging the funding to improve access to blockchain technology in an ever growing list of countries across the world,” Marieke Flament, NEAR Foundation CEO said in a statement.&nbsp;



In 2021, the protocol said it allocated $800 million — which is now valued at about $1.8 billion — to help fuel its mission to decentralize the community and help users reimagine finance.&nbsp;



Since its mainnet launch in the fourth quarter of 2020, the NEAR network has processed over 70 million transactions while supporting over 2.3 million accounts.&nbsp;



The latest funding adds to its $65.9 million raised so far, from backers internationally, including Digital Currency Group, Pantera Capital, Electric Capital, Coinbase Ventures, Blockchain.com and Baidu Ventures. In total, the foundation has raised about $215.9 million.&nbsp;



In the past 24 hours, the NEAR cryptocurrency jumped 9.84%, or $1.72, to $19.36, according to <a href="https://coinmarketcap.com/currencies/near-protocol/" target="_blank" rel="noreferrer noopener">data</a> on CoinMarketCap at the time of publication. The majority of the spike occurred after the foundation released news of the raise.&nbsp;



A handful of funds invested in the private token sale, including Mechanism Capital, Dragonfly Capital, Andreessen Horowitz (a16z), Jump Capital, Alameda Research, Zee Prime and Amber Group.



Angel investors also participated in the round including Alan Howard, a billionaire hedge fund manager, Stani Kulechov, founder of Aave, and Santiago Santos, a member of PleasrDAO.&nbsp;



“We’re delighted to be backed by such a fantastic group of investors. It provides proof of what’s been built, and what’s to come,” Illia Polosukin, co-founder of NEAR Protocol, said in the <a href="https://medium.com/nearprotocol/near-raises-150m-f93eb106dbb1" target="_blank" rel="noreferrer noopener">blog post</a>.



NEAR did not respond immediately to a request for comment by Blockworks.



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