Solana Implements Quantum-Resistant Security

Solana developers have introduced the Winternitz Vault, a cryptographic system invented to protect the blockchain from potential quantum computing threats. This vault uses hash-based signature schemes, creating new cryptographic keys for each transaction to mitigate risks from quantum attacks.

The vault is currently only an optional feature, allowing users to store their assets in these quantum-proof wallets. Developer Dean Little explained that the system generates 32 private key scalars, hashes them 256 times, and stores a single hash for verification.

Each transaction initiates a new key generation process, resembling the idea of using a fresh credit card for every payment. The innovation is a major step forward in blockchain security, but similar efforts have been made before, such as David Chaum’s quantum-resistant Praxxis protocol.

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FTX Users Await Repayments as Plan Takes Effect

FTX’s reorganization plan officially took effect on Jan. 3, clearing the way for certain users to begin receiving repayments within 60 days. Initial payments target “convenience classes,” including users with claims of $50,000 or less. Critics have raised concerns about reimbursements being based on crypto valuations from 2022, which have since increased immensely.

Users must file claims through the official website to qualify, with FTX warning of phishing risks during the process. The repayment plan, approved in October 2024, anticipates that 98% of users will receive 119% of their declared funds. Legal fallout continues for FTX executives, with some imprisoned and others, like Sam Bankman-Fried, appealing convictions.

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Ethena Expands Toward Becoming a Digital Neobank

Ethena plans to launch a synthetic dollar savings token (iUSDe) targeting financial institutions and a Telegram-hosted payments app in Q1 2025. The protocol, managing $6 billion in USDe, seeks to extend its success by integrating with traditional finance markets. Moreover, iUSDe’s structure enables regulated entities to engage without directly interacting with crypto rails.

iUSDe, akin to a financial instrument, offers returns negatively correlated with legacy financial rates, positioning it as a unique product. Ethena’s push aligns with its strategy to expand from DeFi to CeFi, leveraging integrations with major centralized exchanges and asset managers. Ethena's innovations will be invaluable as algorithmic stablecoin platforms expand their adoption.

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Coinbase Secures Key EU License for Derivatives Trading

Coinbase acquired the Cyprus unit of brokerage Bux in mid-2024, securing a MiFID II license for derivatives trading in Europe in October. The license allows Coinbase to expand its services across EU member states without requiring separate national approvals. Rebranded as Coinbase Financial Services Europe, the entity is expected to operationalize the license in early 2025.

Bux had used the license for contracts-for-differences (CFD) products before its sale. The acquisition is another tactical move for Coinbase in Europe that will help it capture more of the $75 billion global crypto derivatives market. This development illustrates Coinbase’s commitment to strengthening its presence in global markets despite growing regulatory demands.

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Data of the Day

BlackRock’s iShares Bitcoin Trust (IBIT) recorded a $332.6 million outflow on Jan. 2, the largest since its launch in January 2024. This was the third consecutive trading day of outflows, with a total of $392.6 million withdrawn last week. Despite these outflows, IBIT was among the top ETFs in 2024, accumulating $37.2 billion in inflows, ranking third behind major TradFi equity funds.

Competing Bitcoin ETFs, including Bitwise and Fidelity, saw inflows on the same day, indicating sustained investor interest in crypto assets. BlackRock’s outflows coincided with broader market trends, as Bitcoin’s price fell below $98,000. Analysts and key figures, including Adam Back and Eric Balchunas viewed the withdrawals as a temporary adjustment rather than a long-term trend against BTC ETFs.

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More Breaking News

• Base is exploring bringing COIN to its Coinbase-incubated layer 2 in 2025, though no concrete plans exist yet, with regulatory clarity being a leading a focus.
• MicroStrategy’s Michael Saylor hinted at another Bitcoin purchase on Monday, following a recent acquisition of 2,138 BTC as part of its 21/21 strategy.
• Polymarket recorded $9 billion in trading volume and 314,000 active traders in 2024, marking a 48x growth YoY despite a December decline post-US election.
• Bitcoin settled $19 trillion in transactions in 2024, doubling 2023’s volume, as BTC reached an all-time high of $108,000 and introduced a US Bitcoin ETF.
• Solayer Foundation launched to support Solana’s restaking protocol Solayer, alongside introducing the LAYER governance token for ecosystem growth.
• BlackRock’s BUIDL token was approved as backing for Frax’s new USD stablecoin, combining blockchain transparency with prime treasury stability.
• Solana wallet Phantom quashed token airdrop rumors and announced new social features while adding support for the Sui blockchain.

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