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Bitcoin miner outflow ratio hits 6-month high in new threat to BTC price

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Bitcoin miners are upping sales, but BTC price metrics hint that a relief rally could be next.

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Bots against humanity — The battle for blockchain supremacy

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Opinion by: Steven Smith, head of protocol and applied research, Tools for Humanity

Blockchains were designed as systems of trust that are transparent, decentralized and accessible. The age of AI has, however, introduced significant new challenges. Nearly half of all internet traffic is generated by bots, with up to 80% of blockchain transactions now automated and AI agents accounting for most onchain activity. 

While some bots serve legitimate and helpful purposes, others — like those used for airdrop farming and fake account creation — clog networks, drive up fees, and monopolize space and resources.

It’s up to humans to protect the blockchains we know and love, ensuring that people aren’t unfairly disadvantaged by automated systems, insulated from the effect of maximal extractable value attacks and exploits, and free from the need to pay significant gas fees to be included in a block.

The bot takeover is already here

AI bots are becoming more integral to networks and capable of more sophisticated exploits, dominating trading volumes, driving up gas fees, and manipulating decentralized finance (DeFi) markets.

In some cases, networks have seen failure rates surge past 75% due to bot-induced congestion. Even Ethereum’s mempool is increasingly flooded with automated transactions, forcing human users to compete for scarce block space.

The problem extends beyond blockchain networks — it’s affecting the entire economy. AI-powered bots are set to disrupt traditional banking and financial services, threatening the very foundations of how money is managed and transactions are conducted.

It’s only a matter of time before bad actors begin deploying new AI-driven fraud tools at scale, creating an unprecedented security nightmare for financial institutions, businesses and users alike. 

This has already begun. AI-driven botnets fueled a 55% surge in distributed denial-of-service (DDoS) attacks against the banking and financial services industry during 2024.

If action isn’t taken, humans risk ceding control of both decentralized and traditional financial systems to automated systems optimized for speed and scale — not fairness or accessibility. 

Scalability alone won’t solve this problem

So far, the response to these issues has focused on scalability. Layer-2 solutions, rollups and high-performance execution clients make transactions faster and cheaper. 

Scaling without a focus on human users, however, leads to unintended consequences. Lower fees mean attackers can cause much grief for little cost, and bots can flood networks more easily. Meanwhile, faster transactions mean AI traders can outcompete human investors even faster.

Recent: Don’t be afraid of quantum computers

This has played out repeatedly already. A spam attack on Zcash severely disrupted its blockchain. During its token launch, Manta Network suffered a DDoS attack, slowing withdrawals and frustrating users. On Ethereum, bots have been used to manipulate gas prices during high-traffic periods, resulting in delayed transactions and higher transaction fees for real humans.

While scalability is critical, it’s equally important to prioritize another fundamental element of blockchain design: proof-of-human.

Proof-of-human infrastructure

Proof-of-human infrastructure is a mechanism that digitally verifies a person’s humanness and uniqueness. This is key to keeping control of blockchain systems in human hands, giving real people the power to ensure blockchains don’t become automated playgrounds for bots — especially as AI agents continue to scale. 

Proof-of-human systems ensure blockchain architecture evolves with a human-first approach. Networks should allocate guaranteed block space for verified human users, ensuring that automated trading bots don’t push out essential transactions.

Introducing gas subsidies for human users can also prevent them from being priced out during periods of extreme network congestion. Optimized execution clients can enhance efficiency while implementing safeguards against bot-driven spam. 

Blockchain architecture has made remarkable strides in scalability, interoperability and security. We also still need to ensure positive experiences for humans. As an industry, it’s fundamental to provide the ability to distinguish between real people and bots online to ensure the sector can continue to grow in the long run. 

The choice is ours. We can allow unproductive bots to take over our networks, pushing out human users and undermining the core promise of decentralization. Or, we can implement the necessary parameters to keep blockchains human-centric and ensure greater control over productive bots, ensuring fairer access, security and sustainability.

Now is the time to act. The future of blockchain and bringing more humans onchain depend on it.

Opinion by: Steven Smith, head of protocol and applied research, Tools for Humanity.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Ethereum Fusaka hard fork set for late 2025 with major EVM changes

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Ethereum’s Fusaka hard fork is expected to take place in the third or fourth quarter of this year, according to an Ethereum Foundation official.

In an April 28 X post, Ethereum Foundation co-executive director Tomasz Kajetan Stańczak said that the organization is aiming to deploy the Fusaka Ethereum network upgrade in Q3 or Q4 2025. Still, the exact rollout schedule has not been decided yet.

The comments come amid controversies over the upcoming implementation of the EVM object format (EOF) upgrade for the Ethereum Virtual Machine (EVM). As Stańczak pointed out, EOF is expected to be a part of the Fusaka network upgrade.

Source: Tomasz Kajetan Stańczak

The EVM is the software that runs Ethereum smart contracts. EOF would implement a series of protocol changes, known as Ethereum improvement proposals (EIPs), with profound implications for how it operates. EOF introduces an extensible and versioned container format for the smart contract bytecode that is verified once at deployment, separating code and data for efficiency gains.

Related: Researcher proposes scaling Ethereum gas limit by 100x over 4 years

Wrap, stamp once, send

Bytecode is a low-level, compact set of instructions. Solidity smart contracts must be compiled into bytecode before the EVM can execute them.

EOF defines a container module for smart contract bytecode, replacing today’s free-form bytecode blobs with a better-defined structure. These objects would be composed of:

A header starting with the 0xEF00 hexadecimal value, followed by a one-byte version number to ensure upgradability.

A section table, providing metadata about the contents of the container. Each entry comprises one byte setting for the kind of entry and two bytes for the entry’s size.

Sections with the actual content, with at least one code section and any necessary data sections — more types of sections could be added through future EIPs.

This structure streamlines EVM operation, allowing for higher efficiency and lower processing overhead. This upgrade would result in a cleaner developer environment and easier-to-understand deployed smart contracts.

Don’t JUMP, RJUMP instead!

EIP-4200, one of the EOF EIPs, provides an alternative to the JUMP and JUMPI instructions, which allow the program to move execution to any arbitrary byte offset. This kind of execution chain leads to hard-to-spot bugs (the JUMP value being wrong in some instances may not be easy to predict) and makes it easy to hide malware in data blobs and move the execution pointer there.

This practice is known as dynamic jump, and EIP-4750 (under review) proposes disallowing dynamic JUMP/JUMPI inside EOF smart contracts, rejecting them entirely during a later phase of EOF deployment. In its current form, this EIP replaces them with call function (CALLF) and return from function (RETF) function calls. Those new instructions would ensure that destinations are hardcoded into the bytecode, but legacy pre-EOF smart contracts would be unaffected.

Developers who opt to use JUMP or JUMPI after the upgrade will have their bytecode go through deploy-time validation, which ensures that they can never jump into data or the middle of another instruction. This verification would take place via EIP-3670’s code-validation rules, plus the jump table (EIP-3690), so every destination is checked.

As an alternative to those functions, EOF implements RJUMP and RJUMPI instead, which require the destination to be hardcoded in the bytecode. Still, not everyone is on board with EOF implementation.

Related: Ethereum community members propose new fee structure for the app layer

EOF has its haters

EOF is the implementation of 12 EIPs with profound implications for how smart contract developers work. Its supporters argue that it is efficient, more elegant, and allows for easier upgrades down the line.

Still, its detractors argue that it is over-engineered and introduces further complexity into an already complex system such as Ethereum. Ethereum developer Pascal Caversaccio lamented in a March 13 Ethereum Magicians post that “EOF is extremely complex,” as it adds two new semantics and removes and adds over a dozen opcodes. Also, he argued that it is not necessary.

He said all the benefits could be introduced in “more piecemeal, less invasive updates.” He added that the legacy EVM would also need to be maintained, “probably indefinitely.”

Caversaccio also explained that EOF would require a tooling upgrade, which risks introducing new vulnerabilities due to its large attack surface. Also, he said, “EVM contracts get much more complicated due to headers,” while currently empty contracts weigh just 15 bytes. Another developer raised a separate point in the thread:

“Perhaps as a meta point, there seems to be disagreement about whether major EVM changes are desirable in general. A stable VM, on which people can invest in building up excellent tooling and apps with confidence, is much more valuable.“

Caversaccio appears to be in good company in his opposition to EOF. A dedicated poll on the Ethereum polling platform ETHPulse shows that 39 voters holding a total of nearly 17,745 Ether (ETH) are opposed to the upgrade. Only seven holders of under 300 ETH voted in favor.

Ethereum EOF implementation approval pool. Source: ETHPulse

Magazine: Ethereum is destroying the competition in the $16.1T TradFi tokenization race

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What happened to sUSD? How a crypto-collateralized stablecoin depegged

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sUSD depeg, explained: Why Synthetix’s stablecoin fell below $0.70

In a significant and concerning event in the cryptocurrency space, sUSD, the native stablecoin of the Synthetix protocol, saw its value plummet to $0.68 on April 18, 2025. 

This drop represents a dramatic 31% deviation from its intended peg of 1:1 with the US dollar, a threshold that is fundamental to the concept of stablecoins. As the name implies, stablecoins are designed to maintain a stable price, which is crucial for their role as a reliable store of value within decentralized finance (DeFi) applications.

For stablecoins like sUSD, maintaining this price stability is essential for ensuring confidence in their usage. However, the steep drop in sUSD’s value sent shockwaves through the crypto community, creating an atmosphere of uncertainty. 

The question arises: How did this once-stable digital asset fall below its peg, and why does this matter to the broader cryptocurrency ecosystem?

SUSD depeg was triggered by a protocol shift (SIP-420) that lowered collateralization and disrupted peg-stabilizing incentives. Combined with Synthetix’s (SNX) price drops and liquidity outflows, confidence in sUSD weakened.

Understanding SIP-420 and its impact

SIP-420 introduces a protocol-owned debt pool in Synthetix, allowing SNX stakers to delegate their debt positions to a shared pool with a lower issuance ratio. This shift boosts capital efficiency, simplifies staking, and enhances yield opportunities while discouraging solo staking by raising its collateralization ratio to 1,000%.

Before SIP-420, users who minted sUSD had to over-collateralize with SNX tokens, maintaining a 750% collateral ratio. This high requirement ensured stability but limited efficiency. 

SIP-420 aimed to improve capital efficiency by reducing the collateral ratio to 200% and introducing a shared debt pool. This meant that instead of individual users being responsible for their own debt, the risk was distributed across the protocol.

While this change made it easier to mint sUSD, it also removed the personal incentive for users to buy back sUSD when its price dropped below $1. Previously, users would repurchase sUSD at a discount to repay their debts, helping to restore its value. With the shared debt model, this self-correcting mechanism weakened.

Consequences of the change

The combination of increased sUSD supply and reduced individual incentives led to a surplus of sUSD in the market. At times, sUSD comprised over 75% of major liquidity pools, indicating that many users were offloading it at a loss. This oversupply, coupled with declining SNX prices, further destabilized sUSD’s value. ​

But this is not the first time Synthetix has experienced volatility. The protocol, known for its decentralized synthetic asset platform, has seen fluctuations during past market cycles, but this recent depeg is one of the most severe in the history of the crypto industry. 

For instance, Synthetix has faced volatility before — during the 2020 market crash, mid-2021 DeFi corrections, and post-UST collapse in 2022 — each time exposing vulnerabilities in liquidity and oracle systems. A 2019 oracle exploit also highlighted structural fragility.

The significance of sUSD’s depeg extends beyond this individual asset and reveals broader issues in the mechanisms supporting crypto-collateralized stablecoins.

What is sUSD, and how does it work?

sUSD is a crypto-collateralized stablecoin that operates on the Ethereum blockchain, designed to offer stability in a highly volatile crypto market. 

Unlike fiat-backed stablecoins such as USDC (USDC) or Tether’s USDt (USDT), which are pegged to the US dollar through reserves held in banks, sUSD is backed by a cryptocurrency — specifically, SNX, the native token of the Synthetix protocol.

Minting sUSD:

The process for minting sUSD involves staking SNX tokens into the protocol. In return, users receive sUSD tokens, which can be used within the Synthetix ecosystem or traded on the open market. To ensure that the sUSD token maintains its value, it is over-collateralized, meaning users must stake more SNX than the value of the sUSD minted. 

Historical collateralization ratio (C-Ratio):

Historically, the collateralization ratio has been set around 750%, meaning that for every $1 of sUSD minted, users need to stake $7.50 worth of SNX tokens.The high collateralization ratio ensures a buffer against the price volatility of SNX, which is critical for the system’s stability. 

In an effort to improve capital efficiency, Synthetix introduced SIP-420, which brought significant changes:

The required C-Ratio was lowered from 750% to 200%, allowing users to mint more sUSD with less SNX.Previously, each user was responsible for their own debt.With SIP-420, debt is now shared across a collective pool, meaning individual users are less directly impacted by their own actions.

As a result of these changes, combined with market factors like declining SNX prices, sUSD has struggled to maintain its $1 peg, trading as low as $0.66 in April 2025. The Synthetix team is actively working on solutions to stabilize sUSD, including introducing new incentive mechanisms and exploring ways to enhance liquidity.

Did you know? Synthetix uses a dynamic C-Ratio to manage system stability. Your active debt shifts with trader performance; profits increase debt, and losses reduce it. Through delta-neutral mechanisms in perpetual futures, liquidity providers absorb imbalances until opposing trades restore balance. It’s a system of shared, fluctuating risk.

Is sUSD an algorithmic stablecoin?

One of the common misconceptions surrounding sUSD is its classification as an algorithmic stablecoin. To clarify, sUSD is not algorithmic — it is crypto-collateralized. 

The key distinction is important because algorithmic stablecoins, such as the now-infamous TerraUSD (UST), rely on algorithms and smart contracts to manage supply and demand in an attempt to maintain their peg, often without actual collateral backing. In contrast, sUSD relies on the value of the underlying collateral (SNX tokens) to maintain its price.

The sUSD peg is not fixed in the same way that fiat-backed stablecoins like USDC are. The Synthetix system allows for some natural fluctuation in the peg. While sUSD aims to stay close to $1, it’s not fixed — instead, the protocol relies on smart, built-in mechanisms to help restore the peg over time when it drifts. 

Here are the key mechanisms post-SIP-420:​

Lower collateralization ratio (200%): As mentioned, the required backing for minting sUSD was reduced, allowing more sUSD to enter circulation with less SNX. This increases capital efficiency but also heightens the risk of depegging.Shared debt pool: Instead of individual debt responsibility, all stakers now share a collective debt pool, weakening natural peg-restoring behavior.sUSD lockup incentives (420 Pool): To reduce circulating sUSD and help restore the peg, users are incentivized to lock their sUSD for 12 months in exchange for a share of protocol rewards (e.g., 5 million SNX).Liquidity incentives: The protocol offers high-yield incentives to liquidity providers who support sUSD trading pairs, helping absorb excess supply and improve price stability.External yield strategies: The protocol plans to use minted sUSD in external protocols (e.g., Ethena) to generate yield, which can help offset systemic risk and reinforce stability mechanisms.

These restoration mechanisms primarily function through incentives. For example, if sUSD is trading below $1, users who have staked SNX may be incentivized to buy discounted sUSD to pay off their debts at a reduced cost. This type of system relies heavily on market dynamics and the incentives of participants to help stabilize the peg.

Did you know? The C-Ratio is calculated using the formula: C-Ratio (%) = (Total SNX value in USD / active debt in USD) × 100. It changes as the price of SNX or your debt share fluctuates — crucial for minting synths and avoiding penalties.

Synthetix’s recovery plan: How it aims to restabilize sUSD

Synthetix has formulated a comprehensive three-phase recovery plan aimed at restoring the stablecoin’s peg to the US dollar and ensuring its long-term stability. 

Synthetix founder Kain Warwick recently published a post on Mirror proposing a solution to fix the sUSD stablecoin. His plan outlines how the community can work together to restore the peg and strengthen the system.

1. Bring back good incentives (the “carrot”)

Users who lock up sUSD will earn SNX rewards, helping reduce the amount of sUSD in the market.Two new yield-earning pools (one for sUSD and one for USDC) will let anyone supply stablecoins and earn interest — no SNX required.

2. Add gentle pressure (the “stick”)

SNX stakers now have to hold a small percentage of their debt in sUSD to keep earning benefits.If the sUSD peg drops more, the required sUSD holding goes up — more pressure to help fix the peg.

According to Warwick, this plan restores the natural loop: When sUSD is cheap, people are motivated to buy it and close their debt, pushing the price back up. Kain estimates it might take less than $5 million in buying pressure to restore the peg — totally doable if enough people participate.

Once incentives are realigned and sUSD regains its peg, Synthetix will roll out major upgrades: retiring legacy systems, launching Perps v4 on Ethereum with faster trading and multi-collateral support, introducing snaxChain for high-speed synthetic markets, and minting 170 million SNX to fuel ecosystem growth through new liquidity and trading incentives.

The sUSD shake-up: Key risks crypto investors can’t ignore

The recent sUSD depeg is a stark reminder of the inherent risks that come with crypto-collateralized stablecoins. While stablecoins are designed to offer price stability, their reliance on external factors, such as market conditions and the underlying collateral, means that they are not immune to volatility. 

Crypto-collateralized stablecoins like sUSD face heightened risk due to their reliance on volatile assets like SNX. Market sentiment, external events, and major protocol changes can quickly disrupt stability, making depegging more likely — especially in the fast-moving, ever-evolving world of DeFi.

Here are some of the critical risks that crypto investors should be aware of:

Dependence on collateral value: The stability of sUSD is directly tied to the price of SNX. If SNX falls in value, sUSD becomes vulnerable to under-collateralization, threatening its peg and causing it to lose value.Protocol design risks: Changes in the protocol, such as the introduction of SIP-420, can have unintended consequences. Misalignments in incentives or poorly executed upgrades can disrupt the balance that keeps the system stable.Market sentiment: Stablecoins operate on trust, and if users lose confidence in a stablecoin’s ability to maintain its peg, its value can rapidly drop, even if the protocol is sound in design.Incentive misalignment: The removal of individual incentives, such as those seen with the 420 Pool, can weaken the protocol’s ability to keep the peg intact, as it reduces the motivation for users to stabilize the system.Lack of redundancy: Stablecoins should have robust fallback strategies to mitigate risks from single points of failure. A failure in one mechanism, like a protocol upgrade or design flaw, can quickly spiral into a full-blown crisis.

To protect themselves, users should diversify their stablecoin exposure, closely monitor protocol changes, and avoid over-reliance on crypto-collateralized assets like sUSD. Staying informed about governance updates and market sentiment is key, as sudden shifts can trigger depegging. 

Users can also reduce risk by using stablecoins with stronger collateral backing or built-in redundancies and by regularly reviewing DeFi positions for signs of under-collateralization or systemic instability.

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