A weekly recap of the most insightful news, analysis, and capital flows in the wild west we call crypto.

Hello and welcome back to the Web3 Rewind! Per usual in this industry, lots has happened this past week. Here's what we have in store for you:

• The good news keeps coming

• Robinhood acquires Bitstmap

• ZKSync airdrop

• Apple WWDC event and blockchains

• io.net CEO steps down

• Solana Foundation un-delegates from validators

The Latest

The good news keeps coming

M&A dept.

Robinhood acquires Bitstamp

Last week, Robinhood announced that it would acquire Bitstamp, a global crypto exchange. The acquisition cost Robinhood $200M, which is a small amount of the $3B+ on their balance sheet. Bitstamp is the oldest active exchange, even older than Coinbase. Having been established in 2011, keeping the lights on for 13 years in itself is very impressive. Surviving is 90% of the battle in crypto.

Given the company’s focus on Europe, Bitstamp was never able to break into the big leagues alongside Coinbase, OKX, Binance, and others. The 4M users may seem small today, but when compared to Robinhood’s existing 13.7M users it’s a significant increase.

In addition, Robinhood’s primary user base is in the US. This is great news for Robinhood’s crypto division which recently has been making a concentrated effort to grow in Europe, listing several popular memecoins such as WIF and launching new staking products.

Most importantly, this is a strong signal that Robinhood is all-in on crypto. Robinhood has been the laughing stock of crypto for a while now, especially after they force-liquidated users’ SOL at $20 under pressure from the SEC, with SOL eventually rallying to $185 in May this year. That started to change recently as they announced a partnership with Arbitrum that would allow Robinhood users to access swaps on the Arbitrum network.

The path forward is clear at this point. Stripe, PayPal, and Robinhood are the smart ones in the room and realize the crucial role that blockchains will play in the future of payments and finance. Making an early move will likely lay the foundation for them to each further dominate in their respective sectors or become generational companies. Such M&A is a good sign that our industry is slowly but surely maturing.

 — Joseph Cooper, Decential Media

Quick Bits

ZKSync airdrop

• Another airdrop, another group of angry individuals. This time, it’s ZKSync’s turn, which announced their airdrop to much fanfare (and by this, I mean to the hundreds of thousands of sybilors who farmed the airdrop).
  

• One notable feature of this airdrop is the larger-than-normal float from day one, with 17.5% of the supply being airdropped, in addition to the four-year unlock on teams/investors. However, unless users hit a minimum of 450 ZK tokens through their eligible criteria, they did not receive any airdrop which left a sour taste for some.

Apple WWDC event and blockchains

• On Monday, Apple hosted its widely anticipated WWDC. Apple revealed a new feature called “Private Cloud Compute” that allows an iPhone to offload complex (typically AI) related tasks to specialized secure devices in the cloud.

• As part of their commitment to verifiable transparency, the plan includes “Publishing the measurements of all code running on PCC in an append-only and cryptographically temper-proof transparency log.” If it sounds like a blockchain, and looks like a blockchain, it’s probably a blockchain.

io.net CEO steps down

• io.net CEO, Ahmad Shadid, stepped down before its widely anticipated airdrop. The decentralized compute protocol’s former Chief Operating Officer, Tory Green, is now in charge.

• Shadid still has tokens to his name, but they will be subject to a four-year lockup. The timing is certainly interesting, and the comment that “I am forced to make the wisest decisions for the best of the $IO Nation” brings up a host of questions.

And last but not least

Solana Foundation un-delegating from MEV validators

The Solana Foundation runs a delegation program. This delegation program distributes SOL to eligible validators to help them get started and be net profitable given the generally high operating costs for a validator. In addition, said delegation program allows the network validator set to be slightly more decentralized as it distributes stake to small validators. Solana is slightly different from Ethereum in that it doesn’t have a mempool, a P2P gossip pool where all transactions that haven’t been included in a block are held. Ethereum on the other hand has a public mempool by default. However, this public mempool means that agents such as searchers and arbitrageurs can extract MEV (maximal extractable value) from users by inserting, removing, and reordering transactions to their liking. This MEV often leads to a subpar user experience and worse trade execution. Solana doesn’t have a public mempool, but validators do have a “mempool” of their own from transactions that are sent to them. Recently, it was discovered that some of these validators were participating in mempools which allowed sandwich attacks, likely occurring by sharing their version of the mempool with outside participants and allowing them to insert their transactions. As a result, the Solana Foundation has decided to remove these validators from their delegation program.

Solana and its ecosystem projects have always taken a harsh stance against MEV and have always favored prioritizing the users. Jito shut down its mempool a few months ago to protect users and their trade execution, and this decision from Solana Foundation is no different. This is in stark comparison to Ethereum, which seems to accept MEV as a way of life, and that the best thing stakeholders can do is try to return some of it to users after they’ve been exploited. However, in theory, it is profitable for validators to allow MEV. It often increases the fees they receive, which is good for both their revenue and stakers’ revenue.

In Solana’s case, it appears that the social layer is coming into play. This social layer is not that different from the social consensus/coordination that the Ethereum world is familiar with. In other terms, we can call it peer pressure. The Solana Foundation absolutely has every right to be opinionated in who they stake with, and it certainly sets a precedent for users and delegators to stake to validators they align with. It shows what the ecosystem stands for, and what delegators and stakers should stand for. The message here is clear, Solana will prioritize the user experience at all costs. If you are a validator opening up your mempool for sandwich attacks, a) you will have a horrible social reputation so it’s likely that institutional capital will not want to stake with you, b) retail will hate you too because you are quite literally running over retail and exploiting them as much as possible. Things are balanced in Solana land, as they should be. Ethereum, your turn. — JC

Have you read the definitive history of Ethereum? No? Well then get your copy of Out of the Ether while you can.