Hyperliquid Responds to Decentralization Criticism

Welcome to The Protocol, CoinDesk’s weekly wrap-up of an important tales in cryptocurrency tech improvement. I am Ben Schiller, CoinDesk’s Options and Opinion Editor.

On this challenge:

HyperLiquid responds to criticism over decentralization
StarkWare launches appchains on Starknet
Arbitrum deepens ties to South Korea’s Lotte Group
Do Kwon prison trial set for 2026
Pyth Community companions with Revolut in DeFi information deal
Ripple goals to spice up stablecoin’s utility in Chainlink deal
AI cash fail to match 2024 efficiency, regardless of bullish outlook

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Community information

HYPERLIQUID CRITICISM: HyperLiquid, a serious up-and-comer on the planet of decentralized finance, got here beneath fireplace this week over claims that the community is overly centralized and troublesome to work with. HyperLiquid is finest identified for its flagship decentralized alternate and it just lately launched a layer-1 blockchain — all bids by the startup to, based on its flashy net copy, ultimately “home all finance.” Regardless of incomes plaudits for its quick and easy-to-use alternate interface, HyperLiquid has been criticized for, amongst different issues, working a closed-source codebase. In keeping with a widely-shared X thread from Kam Benbrik, an worker on the validator agency Refrain One, the validators powering HyperLiquid are largely blind to how the chain works beneath the hood, making it troublesome for them to function the {hardware} that is speculated to run the chain. Benbrik additionally raised considerations that HyperLiquid’s extremely concentrated token provide — and its course of for admitting validators to its L1 chain — make the chain centralized and weak to failures. “Hyperliquid should enhance transparency, decentralize staking, implement a good validator choice course of, and have interaction extra with exterior validators,” Benbrik wrote. The complaints come on the heels of a flurry of constructive media consideration for HyperLiquid following November’s massively profitable HYPE airdrop. It hasn’t all been clean crusing for the startup, nevertheless, with scrutiny arising in December following reviews of potential North Korean exercise on the community — interpreted by some as an indication that the regime well-known for its crypto-hacking efforts may need HyperLiquid in its crosshairs. HyperLiquid has batted away the North Korean safety considerations, and it just lately addressed the centralization and closed-source critiques in an X thread, stating that the criticisms largely stemmed from “misconceptions” about its tech. Read more. –Sam Kessler

SOLANA’S FIREDANCER FORGES AHEAD: Solana is charging forward with its next-gen blockchain shopper “Firedancer,” pushing validators working the chain to undertake a stripped-down model of the improve forward of a wider, yet-to-be-scheduled official launch. “Firedancer’s proponents imagine the software program – developed by the crypto arm of buying and selling big Bounce – will give Solana an unbeatable edge in crypto’s race to woo world monetary markets onto blockchains,” writes CoinDesk’s Danny Nelson. “They level to its theoretical velocity: a million transactions per second, orders of magnitude sooner than any blockchain-based system as we speak.” –Sam Kessler

STARKWARE APPCHAINS: Starknet, the layer-2 blockchain on Ethereum identified for its embrace of zero-knowledge (ZK) cryptography, is including appchains. StarkWare, the first developer of Starknet, advised CoinDesk that its “SN Stack” will let builders simply construct blockchains tailor-made to particular crypto use circumstances. Read more

ARBITRUM-a-LOTTE: Arbitrum, the most important layer-2 community on Ethereum, plans to deepen ties with Lotte Group, the multibillion-dollar South Korean conglomerate identified for its huge portfolio of purchasing malls, media corporations and leisure properties. Offchain Labs, the developer behind Arbitrum, and the Arbitrum Basis, the non-profit that stewards the mission’s improvement, mentioned a monetary deal is within the works that will cement Arbitrum as the principle blockchain infrastructure supplier for “Caliverse,” Lotte’s metaverse gaming platform. Read more

AVALANCHE UPGRADE: Avalanche, now the tenth-largest L1 by complete worth locked (TVL), activated its extremely anticipated Avalanche9000 improve, marking its greatest technical modifications since launch in 2020. The community has been prepping these modifications for months, with new options that can lower the prices for sending transactions, working validators and constructing functions on the community. Leaders at Avalanche mentioned the improve is supposed to draw builders, encouraging them to create personalized blockchains utilizing its expertise, often known as subnets, or “L1s.” Read more.

DO KWON TRIAL: Terraform Labs co-founder and former CEO Do Kwon’s prison fraud trial within the U.S. has been tentatively scheduled for January 2026, permitting prosecutors and Kwon’s protection attorneys time to assessment the “large” six-terabyte trove of knowledge anticipated to be produced in the course of the discovery course of. Throughout an preliminary listening to in Manhattan this week, lead prosecutor Jared Lenow advised the court docket that the federal government anticipated to face further delays resulting from challenges accessing encrypted data and unlocking 4 cell telephones supplied by Montenegrin authorities once they extradited Kwon to the U.S. on Dec. thirty first. Lenow added that the federal government should additionally translate extracted materials from Kwon’s native Korean. Read more.

PYTH PARTNERS: Blockchain oracle agency Pyth Community has partnered with neobank Revolut to port digital banking information into decentralized finance. Revolut will present information for greater than 500 markets together with international alternate, equities and commodities. Revolut additionally runs a crypto alternate though quantity information is just not printed. Pyth competes with ChainLink and goals to offer correct value feeds for DeFi protocols. It airdropped its native token (PYTH) in 2023 and has $7.5 billion in worth secured on its oracle, based on DefiLlama. Pyth additionally receives information from crypto exchanges Bitstamp, Bybit and Binance in addition to a number of buying and selling companies equivalent to Jane Avenue and Cumberland DRW. Read more.

AI COINS: AI-crypto tokens are failing to stay as much as their lofty 2024 objectives regardless of Nvidia’s (NVDA) recent conference sparking bullish sentiment amongst AI shares within the conventional markets. Final March, the NEAR token doubled within the lead-up to Nvidia’s annual convention, beneficial properties that had been mirrored throughout the broader crypto AI market. Fetch.AI (FET), the graph (GRT) and singularityNET (AGIX) all posted important rallies to the upside in unison with the convention. Why are AI tokens dropping momentum? One purpose: the emergence of AI agent tokens. Read more.