Hi,

Compared to BTC or SOL communities, this cycle has been difficult for the ETH community.

On the one hand, ETH still hasn't ATH this cycle. On the other hand, X timeline is filled with how SOL overtook ETH in terms of Real Economic Revenue or how their active users are higher than ours. BTC has also managed to set itself apart from others, at least in the mainstream.

Many are blaming Ethereum's rollup strategy for this.

I don't think the rollup strategy was wrong. But the fragmentation it caused definitely created a lot of problems for us.

In 2077, we published a lot about solving these interoperability challenges. From intents to common standards.

Personally, I'm most excited about Based rollups.

TLDR; they're just like regular rollups, but instead of the centralized sequencer, they'll use the Ethereum L1 validator set as a shared sequencer with others.

Here's the best short explainer of how based rollups work:

If you want a longer technical explanation, here you go.

The reason why I like them is because they'll give us full synchronous composability with ETH L1 & other based rollups. For users, based ecosystem will feel like a single blockchain.

I also think they’ll add more value to ETH.

If we make the based rollups native as well, deploying rollups will be equal to deploying smart contracts. We'll then have cheap blockspace with unlimited scale.

Now, there are a couple more challenges like based preconfirmations before the wider community adopts this. But it is coming soon.

I think ETH is in the awkward teenage phase. We're in the uncanny valley. So no new people are attracted to Ethereum. Only the autistic nerds can see the bright future.

But we're getting out of it. In just a couple more months, Ethereum will be able to show all its awesomeness to the wider community.

📖 2077 Research

Designing Cross-L2 Interoperability Standards: The Impact of Shared Resources

Fragmentation is the biggest problem in Ethereum.

There are many interoperability solutions that tackle this problem. This research explores those solutions and the role of shared resources.

Here's the thread version of the report.

ERC-7699: ERC-20 with Transfer Reference Extension

Ethereum allows devs to create many types of tokens optimized for various use cases.

ERC-7699 enhances the ERC-20 token standard by adding reference capabilities to transfers. This standard should bridge the gap with TradFi since they payment references are a basic TradFi feature.

Today's report dives into ERC-7699. Here's a shorter summary thread as well.

🌍️ Ecosystem Updates

Hoodi, a new Ethereum testnet, will go live tomorrow to wrap up Pectra testing. The Pectra upgrade will be scheduled 30+ days after Hoodi forks successfully.

LayerZero introduced lzRead. It allows smart contracts to query and compute data from any source, in seconds, with minimal gas fees.

Arbitrum updated the Arbitrum Portal. Now you can find all native Arbitrum apps in a single place. There's a form to add your project to the portal as well.

Lens Chain introduced Grove: Onchain-Controlled Storage. It'll allow users to control and monetize their content while managing access.

3Jane released its whitepaper. It claims to design a capital-efficient and scalable money market on Ethereum that'll allow users to borrow at 0% collateral.

Ai16z released an article on the path to secure and efficient zkVMs. It shares a great framework for tracking the progress towards that goal.

0xmikko.eth open-sourced SafeWatcher, a monitoring tool that notifies you of all changes to your Safe account.

StarkNet is planning to launch staking v2 on mainnet in Q2 2025. The new version will add a fair and transparent commission increase feature among others.

Argent introduced Invisible SDK. It allows devs to onboard users to Starknet apps with a web2-like experience.

Spark Protocol, a subDAO of Sky Ecosystem, is expanding to Arbitrum. It promises to bring the Sky Rate and better liquidity to more protocols on Arbitrum.

Ethereum Foundation has finalized to host Devconnect in Argentina from 17-22 November 2025.

Brale issued MXNe in partnership with Etherfuse. MXNe is a Mexican peso-backed stablecoin, it can potentially lead to more adoption from the nation.

The Rig, the native liquid staking protocol for Fuel is here. They're accelerating the developments to shift timeline from the next 6 months to the next 1-2 months.

Optimism started the OP Futarchy Contest. You can make forecasts on which grant recipients will increase Optimism’s TVL the most. Accurate forecasts will receive OP reward.

Spire Labs is partnering with Obol Collective to bring Obol Distributed Validators to Based Stack. It'll add new revenue streams for Obol Operators as well.

Lido released the vision for its Community Staking Module v2. The goals include scale beyond 10% share of stake, onboard solo stakers and DAOs, and more.

Circle released CCTP V2. It adds instant cross-chain USDC settlement, enhanced post-transfer composability via Hooks, and 1:1 burn-and-mint without liquidity pools.

Aave introduced a new project called Horizon, which'll give stablecoin liquidity to institutions by using RWAs as collateral. There was a debate surrounding issuing a new token for the project.

🧪 Nerd Corner

There’s a new EIP that looks to remove the 24KB contract code size limit and replace it with a gas metering mechanism.

Restricted execution transaction is proposed by a new EIP. It allows senders to impose restrictions on the outcomes of their transactions.

DAGPool is a new mempool protocol to process transactions to achieve scalability, order fairness, and censorship resistance.

Value accrual of ETH from the rollup activity is a highly debated topic. Blob fees will be the main way for ETH to accrue value. This article looks into the price dynamics of blobs.

Fraud proofs of optimistic rollups require a challenge period. Bribing block builders to ignore transactions is an attack vector for them. New research looks into protection against that attack.

New research analyzed the Beacon Chain from the genesis to assess its liveness. They found four types of events that created 33 situations where the chain fell to concerning levels.

🐦️ Top Reads

Related: here’s our article on Wildcat.

That’s a wrap for this week!

Got any suggestions to make the newsletter better? Just hit reply — I’d love to hear them.

Cheers,
Yayya

Disclaimer: I’m not a financial or legal or any other kind of advisor. Crypto is extremely risky. This content is for education and information purposes only.