The Protocol: Weekly Wrap-up of the Most Important Stories in Cryptocurrency Tech Development

Welcome to The Protocol, CoinDesk's weekly wrap-up of the most important stories in cryptocurrency tech development.

output: Welcome to The Protocol, CoinDesk’s weekly round-up of the most important stories in cryptocurrency tech development, written by the Tech team.

This week's newsletter is brought to you by Margaux Nijkerk, who is the Ethereum protocol reporter on CoinDesk's Tech team. You can reach her at margaux.nijkerk@coinmail.cc.

Network Pectra Finally Goes Live on EthereumAfter months of anticipation, Ethereum finally activated its long-awaited “Pectra” upgrade on Wednesday. The integration marks the blockchain’s most significant overhaul since the Merge in 2022. It aims to streamline staking, enhance wallet functionality, and improve overall efficiency. The update arrives as Ethereum is contending with both rising competition from other blockchains and internal debates over its direction. A key element of the Pectra upgrade involves increasing the amount of ETH one can stake with a single validator from 32 to 2,048. This change could help to speed up and streamline operations for stakers, the vast network of companies and individuals who help to keep the Ethereum network afloat. Previously, those who wanted to stake at scale would have to set up multiple validators to reach that goal, but now they will be able to aggregate up to that amount in a single node.

The upgrade also includes several other changes, such as an improvement to the Ethereum Virtual Machine (EVM) that will allow for greater smart contract functionality and a new standard for interacting with smart contracts, known as "EIPs." Among the EIPs being introduced with Pectra is one that will enable smoother integration of Paymaster contracts, which are used to aggregate and pay for multiple small transactions. This integration is part of a broader effort to reduce gas fees and improve efficiency for users.

Pectra is the culmination of a year of development and testing by the Ethereum community. It is a testament to the dedication and expertise of the engineers, researchers, and other contributors who work tirelessly to maintain and improve one of the world’s most used blockchains. As the cryptocurrency markets become increasingly competitive, and protocols like Solana and Aptos gain traction, the community is focused on making sure Ethereum remains at the forefront of the industry.

Bitcoin Core Devs to Remove OP_RETURN Limit, Sparking DebateThe developers of Bitcoin Core, the most popular node software, said they plan to scrap the OP_RETURN in the next release. The small change to the code will spark a broader debate about the role of programmability in Bitcoin, and whether it should be used more to create new use cases or kept to a minimum to preserve Bitcoin’s financial essence.

The OP_RETURN limit is an 80-byte cap on the amount of arbitrary data that can be included in a Bitcoin transaction. This small piece of code has sparked heated discussion over the past year as it becomes increasingly clear that the demand for greater payloads is outpacing the current offering.

Those arguing for keeping the 80-byte limit intact say that removing it will open the door to abuse, spam and a shift away from Bitcoin’s primary focus on finance. They also worry that increasing the OP_RETURN limit will create technical difficulties and instability for Bitcoin nodes.

But those in favor of removing the 80-byte limit say it will promote transparency and simplify data use on Bitcoin. They add that the 80-byte limit is already de facto bypassed today with techniques like SLIP-73.

Worldcoin Comes to 6 U.S. Cities with Biometric OrbsSam Altman’s blockchain project, World, is launching in the U.S. – and said it intends to roll out 7,500 eye-scanning “orbs” in cities across the country by the year’s end.

World’s orbs – chrome, bowling ball-shaped devices that scan a person’s iris to confirm their identity – will initially be available to Americans in six “key innovation hubs,” the company said: Atlanta, Austin, Los Angeles, Miami, Nashville and San Francisco.

Those who decide to take the plunge and gaze into the orb will gain access to the World app and receive an airdrop of World’s WLD token. By the year’s end, the project aims to have enough orbs to give 180 million Americans – more than half the population – access to World’s network.

After 8 Years, Aztec Testnet Is LiveAztec, a layer-2 rollup focused on privacy, shared that its testnet has finally gone live. The announcement comes as a wave of new privacy-focused solutions begins to capture the interests of large institutions that need confidentiality with large transaction batches. The team behind Aztec said that they have been working on the product for over eight years, bringing the cutting-edge technology one step closer to the mainnet.