Crypto Insights#
Rust Library for Descriptor Encoding Cuts Size by ~40%#
Developer Josh Doman introduced a Rust library that encodes and decodes Bitcoin wallet descriptors, achieving a 30-40% size reduction. This compression is especially useful when sharing a descriptor via QR code, NFC, or in a data-constrained environment.
Fee Estimation Library Augur Open-Sourced, 20â30% More Efficient Than Bitcoin Core#
The recently open-sourced Augur library offers an alternative to Bitcoin Core's fee estimator, which relies on historical blocks and transaction confirmation times to predict future feesâa method that falters under volatile fee conditions.
Instead, Augur estimates fees based on the current mempool state, transaction arrival rates, and mining randomness. Augur has demonstrated consistent fee savings of 20-30% compared to Bitcoin Core, without compromising confirmation reliability.
Augur offers estimations tailored to user confidence levels. For example, to achieve a 95% confirmation probability within 6 blocksâeven in worst-case scenarios (e.g., only 3 blocks in 1 hour instead of the expected 6)âAugur provides a fee recommendation based on probability distribution, rather than on points:
- 50% (optimistic): fee minimization
- 80% (balanced): balanced estimates
- 95% (conservative): for critical transactions
Despite its improved accuracy, Augur isn't suited for integration into Bitcoin Core due to:
- Mempool divergence: Your node's mempool may differ from those of the miners, due to network topology, policy differences (a pre-taproot node won't see taproot transactions), or out-of-band transaction submission.
- Assumption mismatches: Augur assumes standard transaction policies, but nodes/miners may apply custom policies.
- Network connectivity: Poor connectivity may cause underestimation during high-activity periods.
The Rich Get Richer: Unintentional Forks' Impacts on Bitcoin Mining Fairness#
Bitcoin is a representative decentralized currency system. For the security of Bitcoin, fairness in the distribution of mining rewards plays a crucial role in preventing the concentration of computational power in a few miners. Here, fairness refers to the distribution of block rewards in proportion to contributed computational resources. If miners with greater computational resources receive disproportionately higher rewards, i.e., if the Rich Get Richer (TRGR) phenomenon holds in Bitcoin, it indicates a threat to the system's decentralization. This study investigates fairness in Bitcoin's reward distribution by analyzing unintentional blockchain forks, an inherent phenomenon in Bitcoin. Previous research has failed to provide generalizable insights due to the low precision of their analytical methods.
The study shows that the mining profit rate depends linearly on the proportion of hashrate. Furthermore, it examines the robustness of this result from multiple perspectives in scenarios where block propagation delays between different miners are not necessarily fixed.
How Secure is Your Bitcoin Wallet's Mnemonic Seed Phrase?#
This interactive guide walks through entropy, checksums, SHA-256, and how they tie into HD wallets. Originally a personal JavaScript experiment, it helps users understand the construction and security of their seed phrases.
RGB Releases Consensus v0.12#
RGB v0.12 Consensus represents a result of 8 months of protocol re-design, with goals including:
- Make protocol ready for zk-STARK compression: Introduces zk-AluVM, a compact, Turing-complete zk-VM with a simplified 40-instruction set and one-time memory.
- Protocol simplification: Simplify the protocol as much as possible, with consensus code size cut by 4x, standard library by 2x, and ~30% of generic type parameters removed.
- Payment Upgrades:
- Richer invoices
- Multi-asset contracts
- Payment scripts to construct and execute complex payments
- Re-org support with a mathematical model defending against multiple and deep re-orgs
- Enhanced Performance & Wider Test coverage: Ensure security of the protocol with thorough unit and integration test coverage, including tests for potential attacks;
Cross-Network De-Anonymization via ADDR Fingerprinting#
Daniela Brozzoni shared her research on how analyzing Bitcoin nodes' ADDR responses can be used to identify the same node operating across different networksâexposing a de-anonymization risk.
She found that ADDR responses across different networks are often comparable, especially when looking at addressâtimestamp pairs. This means an attacker could match overlapping entries to link separate node identities to a single entity. For example, if a node's ADDR responses on both IPv4 and Tor contain highly similar addresses with matching timestamps, itâs likely those identities belong to the same entity.
She also suggests the most straightforward solution is to break the fingerprint by manipulating timestamps. There are essentially two approaches to achieve this, but both aim to reduce the usefulness of timestamps for attackers.
CLINK: Nostr-Native Standards for Lightning Network Interactions#
CLINK (Common Lightning Interactions with Nostr Keys) defines a Nostr-native standard for Lightning interactions. It leverages Nostr's built-in transport, identity, and encryption to enable secure communication between nodes, wallets, and appsâwithout relying on traditional web infrastructure, while remaining web-friendly and facilitating self-custody.
This novel use of Nostr greatly enhances user experience and unlocks new use-cases versus the status quo of approaches like LNURL, Bolt12, and NWCâwithout compromising sovereignty.
CLINK leverages Nostr's cryptographic identity and event-based messaging to:
- Simplify user experience with direct, spontaneous interactions using familiar Nostr identifiers (NIP-05 addresses).
- Reduce infrastructure dependency by operating entirely over Nostr where desired.
- Enhance security by using signed events and web-of-trust identity.
- Foster a native ecosystem for Lightning and Nostr-powered apps.
Fairgate Breaks BitVM3 Authenticity with Minimal Counterexamples#
The Fairgate team analyzed the RSA-based garbling in BitVM3 and demonstrated a minimal counterexample breaking its authenticityâeven with a very small circuit. The minimal counterexamples are aimed at the security of the BitVM3 garbling scheme presented in BitVM3 whitepaper (BitVM3: Efficient Computation on Bitcoin). Then they use a small circuit consisting of two AND gates and three inputs to exhibit an attack on the forward label propagation garbling scheme proposed in Instantiating BitVM3 from Label Forward Propagation.It shows that in both cases, the authenticity property of the garbling scheme is broken.
Babylon's 2025 Roadmap: BTCFi via BitVM#
Babylon's 2025 roadmap indicates that their research team is making trustless and non-custodial Bitcoin liquidity possible through BitVM and application layer innovations. Having already proved that BitVM works on Bitcoin mainnet, next up, they will:
- Build production-ready Bitcoin bridge
- Maximize the capital efficiency of the collateralized BTC via integration with the staking layer to generate rewards
- Move from theory to application
The roadmap presents that by Q3 2025, they will deploy:
- A Bitcoin multi-staking testnet covering:
- ETH Rollups: Optimism, Arbitrum
- Cosmos Chains: Multiple sovereign networks. And more tech stacks will follow
- Babylon genesis EVM testnet will acquire full EVM capability, leveraging EVM's vast and mature adoption to unlock easy deployment of DeFi dApps.
The mainnet release of the above two is expected in Q4 2025.
StarkWare x Kakarot: ZK Proofs on Everyday Devices#
StarkWare and Kakarot are co-developing CairoM, a ZK stack (language + compiler + VM + prover) that maximizes S-two's capabilities for client-side proving. It is designed to serve as the foundation for real-time proving on smartphones and laptops.
Rarimo Launches Wrapless BTC Collateral Protocol#
Rarimo introduced the Wrapless Protocol that enables BTC-backed loans without custodial wrappers. This approach locks BTC in the "loan channel" and provides a loan on another blockchain platform, such that the loanâs installment (which can be partial) results in unlocking the corresponding amount of BTC.
The advantage is that, without any trusted party, it represents a game between the borrower and lender, where cheating by any party is economically irrational. The most significant limitation so far observed is that the solution is peer-to-peer and does not facilitate liquidity aggregation.
Details in Wrapless Book v0.3.
More Beyond the Chain#
What Would Stripe L1 Look Like?#
As a global payment service provider, Stripe connects merchants, acquiring banks, card networks, and issuers. In this X post, the author imagines a Stripe L1 chain that supports stablecoin use and Stripe L1 integration for customer payments and merchant settlement.
In the bull case, it could revolutionize the payment system by enabling:
- direct payments bypassing card issuers and networks
- micro-streaming subscriptions previously impossible in legacy systems
- yield generation from short-term deposit balances held on Stripe L1
While Stripe currently functions primarily as a payment gateway and acquirer, a potential Stripe L1 would position the company to assume roles traditionally filled by issuing banks and card networks. This would represent a milestone in the payments industry.
Control as a Spectrum: Tailoring the Right Model#
In this post, the author argues that "control = bad" is an oversimplification. Instead, control should be viewed as a spectrum, and teams should tailor governance models by asking:
- Who is in control?
- What can the control do?
The way to toggle "Who is in control?" is through decentralization; as for "What can the control do?", it is through scoping. The respective spectrums are:
- Decentralization: One party controls > a multisig of insiders controls > a multisig of independent parties controls > a DAO controls > full immutability
- Scoping: Full upgradeability > full upgradeability with a timelock > upgradeability of specific external dependencies (like swapping out an oracle) > pause functionality > full immutability
Control has benefits from a business perspective and costs from a risk perspective. You should try and pick the non-negotiable facets of your business that require control and tailor-fit the level of control to match that.
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