Vitalik Buterin's stern warning on Layer 2 roadmap

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network news

Vitalik Buterin says Layer 2 roadmap 'no longer makes sense': Ethereum co-founder Vitalik Buterin said that as blockchain's main networks continue to expand and transaction costs remain low, we need to rethink the role of layer 2 networks. In a post about X, Buterin said that the original rollup-centric roadmap that positioned Layer 2 as the primary way to scale Ethereum “no longer makes sense.” Its roadmap envisions Layer 2 as a secure extension of Ethereum, capable of processing most transactions while inheriting Ethereum's security guarantees, and often described as a “branded shard” of the network. According to Buterin, two developments called into question the original vision of Layer 2 networks. First, progress between layer 2 toward later stages of decentralization is slower and more difficult than expected. Second, Ethereum is currently expanding directly at layer 1, fees will remain low, and gas limits are expected to increase significantly. In his view, as Ethereum itself expands, the Layer 2 network no longer needs to function as a formal extension of Ethereum. He also noted that many Layer 2s are “unable or unwilling” to meet the decentralization and security standards required by this model, and that some Layer 2s may intentionally choose not to move beyond Stage 1, including for regulatory reasons. — Margaux Nykerk read more.

Open source alternatives to Bitcoin: Tether has released an open-source operating system for Bitcoin mining, pitching it as a way to simplify running mining infrastructure while reducing reliance on closed, vendor-managed software. The stablecoin issuer said it has rolled out MiningOS (MOS), a modular and scalable mining operating system designed for everyone from hobby miners to large-scale organizations. This stack aims to remove the “black box” nature of many mining setups, where hardware and monitoring tools are tightly tied to proprietary platforms. “MiningOS changes that – bringing transparency, openness, and collaboration to the core of Bitcoin infrastructure,” Tether said on the project website, adding that the system is built with “no lock-in.” According to Tether, MOS uses a self-hosted architecture and communicates with connected devices through an integrated peer-to-peer network, allowing operators to manage mining activities without relying on centralized services. According to the company, miners can adjust settings through the companion platform depending on the size of their operation and output requirements. CEO Paolo Ardoino calls MOS a “complete operational platform” that can scale from home environments to “industrial-grade” sites spanning multiple geographies. Tether first previewed plans for an open source mining OS in June, arguing that new miners should be able to compete without relying on expensive third-party vendors for software and management tools. — Shaurya Marwa read more.

Ethereum Foundation Post Quantum Team: Quantum computing has long been a non-theoretical threat to blockchain cryptography. But over the past few months, that calculus has changed. While the Bitcoin community has been discussing threats to its protocol for the past year, the Ethereum community appears to have just taken its first steps. “Quantum computing is moving from theory to engineering,” said Thomas Kolatgaer, who leads the post-quantum (PQ) team at the Ethereum Foundation (EF). “That means we need to be prepared because it changes the timeline.” In early January, the foundation officially elevated post-quantum security to a strategic priority, creating a dedicated team to drive research, tools, and real-world upgrades to protect the network's cryptographic foundations. At the same time, major industry participants are building their own defenses. Coinbase announced an independent quantum advisory board staffed with leading cryptographers to guide its long-term blockchain security plans, suggesting that even its custodial infrastructure must prepare for risks in the quantum era. And across the ecosystem, Optimism, one of Ethereum's largest Layer 2 networks, has developed a formal 10-year roadmap to transition the Superchain stack from wallets to sequencers to post-quantum cryptography, phasing out weak signatures, and working to ensure continuity across the Layer 2 network. Taken together, these movements represent a significant change. Post-quantum security is no longer an incidental topic in the distant future, but a living concern shaping development roadmaps, governance discussions, and ecosystem alignment within and beyond Ethereum. For EF, the move towards post-quantum security is not about sounding the alarm, it's about protecting against injustice. — Margaux Nykerk read more.

READ Base, BNB chain, Ethereum, etc.

new lending protocol $XRP assets: Flare blockchain is $XRPWe enable linked assets through our integration with Morpho, a crypto lending protocol that runs across multiple Ethereum compatible chains. This update will allow users to lend and borrow on the FXRP version. $XRP According to the blockchain development team, it was designed for use with Flare. Flair proposed the move as a step toward donation. $XRP Owners have more ways to earn yield and use their tokens beyond holding and trading. For many years $XRP Decentralized finance (DeFi) options have been sparse compared to tokens built on smart contract networks. Flare aims to change that by building tools that: $XRP Can be used in on-chain apps while preserving the original $XRP in $XRP ledger. FXRP holders can now deposit their tokens to earn interest and borrow against other assets such as stablecoins using FXRP as collateral. Flair said these positions can also be combined with other features on the network, such as staking and yield products, for users who want a more active strategy. Morpho is different from older lending apps that mix many assets into one shared pool. Each lending market is set up with one collateral asset and one borrowed asset, and the rules for that market are set at creation. This structure is intended to prevent problems in one market from spilling over into other markets. — Shaurya Marwa read more.

In other news

Sandy Kaul, head of innovation at Franklin Templeton, says the next evolution in wealth management will not just be digital but “wallet-native.” Speaking at the Ondo Summit in New York on Tuesday, Kaur said he envisions a future where all financial assets such as stocks, bonds and funds are held and managed through tokenized digital wallets. “All of people’s assets are going to be reflected in these wallets,” she said. The panel, which included Fidelity's Cynthia Lo Bessette, State Street's Kim Hochfeld, and WisdomTree's Will Peck, agreed that tokenization is no longer a theoretical concept. After years of slow progress, the infrastructure is now in place and the use cases have expanded beyond initial experiments. Panelists warned that building utility and trust is now the industry's biggest challenge. “The idea of bringing in assets and expressing them on-chain using tokens is the easiest part,” said Roe Bessette, head of digital asset management at Fidelity. “The hardest part is building a working ecosystem.” Despite recent growth, adoption is still early. Hochfeld, State Street's global head of digital and cash, said much of his current work is focused on internal and customer education. “We're not seeing a rush to the door yet,” Hochfeld said. “We have to experiment…and see what works.” — helen brown read more.
TRM Labs, a blockchain analytics startup used by global law enforcement and financial institutions, has raised $70 million in a new funding round, pushing its valuation to $1 billion. As reported by Fortune, the Series C round was led by Blockchain Capital with participation from Goldman Sachs, Citi Ventures, Bessemer, Thoma Bravo, and Brevan Howard. The company has raised nearly $150 million to date, with another $70 million in funding in 2023 and other smaller funding rounds, bringing the total to $220 million, according to TheTie data. The company's software helps track cryptocurrency transactions across multiple blockchains. This service is becoming increasingly in demand as cryptocurrency crimes become more complex. TRM's clients include major banks as well as several major government agencies, including the IRS and FBI. This was a decision that set us apart from our competitors, as it was a pioneer in tracking not just Bitcoin, but various other cryptocurrencies as well. As criminal networks diversify their use of tokens and platforms, that edge becomes even more valuable. — Francisco Rodriguez read more.

READ Blockchain Oracle Redstone will work with Securitize to bring tokenized Tradfi assets to Solana

regulation and policy

At a White House meeting aimed at thawing the ice between crypto companies and Wall Street bankers, crypto insiders, who far outnumber bankers, walked out feeling that banks were dragging their feet on agreeing to a crypto market structure bill. The White House gave them new marching orders “to reach a compromise on new language on stablecoin yields by the end of the month,” according to people familiar with the talks. The cryptocurrency industry's top policy priorities still struggle to advance in the U.S. Senate, and the longer a full Senate vote is delayed, the less likely they are to materialize this year. The rally, led by President Donald Trump's crypto advisor Patrick Witt, primarily focused on whether stablecoins should be tied to yields and rewards. Policy experts from the crypto industry and Wall Street banks gathered in the White House diplomatic reception room and discussed for more than two hours how to overhaul the bill's most onerous provisions, according to people familiar with the matter. Talks will continue with a more limited group of people, and the White House has asked for people to come to the table ready to agree on actual changes to the bill's language, the people said. One of the people said bank representatives are members of an industry group and may need to get buy-in from members before proceeding with negotiations. — jesse hamilton read more.
Lin Ruixiang, the alleged operator of the dark web drug market Incognito Market, was sentenced to 30 years in prison, bringing to an end one of the largest online drug market prosecutions since Silk Road, the U.S. Attorney's Office for the Southern District of New York announced. Lin, a 24-year-old Taiwanese national who used the pseudonym “Pharaoh” online, pleaded guilty in December 2024 to drug conspiracy, money laundering, and conspiracy to sell adulterated and counterfeit drug products. According to prosecutors, the platform processed more than $105 million in illegal drug sales between October 2020 and March 2024, facilitating more than 640,000 transactions and serving hundreds of thousands of buyers around the world. “Rui Xian Lin was one of the world's most prolific drug traffickers, using the Internet to sell more than $105 million worth of illegal drugs domestically and around the world,” U.S. Attorney Jay Clayton said in a statement. “Although Lin amassed millions, his crimes had devastating consequences. He is responsible for at least one tragic death, exacerbating the opioid crisis and creating misery for more than 470,000 drug users and their families.” — sam reynolds read more.

READ DTCC's collateral app chain wants to rewrite the rules of the Tradfi settlement