Ethereum co-founder Joseph Lubin has a thesis about artificial intelligence. It is smart, maybe even creative, but it cannot make anyone trust it.
Speaking on CNBC in an interview on October 7, 2026, Lubin argued that blockchains like Ethereum are what can fill that gap. In his view, AI and crypto will eventually merge into a single system where automated work gets commissioned, completed and paid for.
Creativity is cheap, trust is not
Lubin, who founded ConsenSys, split the value of AI into two buckets. On one side sits what AI might offer: creativity and expertise. On the other sits what it cannot produce on its own: trust.
Lubin’s argument is that blockchains solve exactly that problem. A public ledger records who asked for what, whether the job was delivered, and whether payment cleared, all without a middleman vouching for either side.
According to Lubin, decentralized protocols on Ethereum can provide the trusted framework for that kind of activity. That means AI agents could, in theory, hire other agents, verify the output and settle the bill on-chain.
Not a new idea for Lubin
He has previously hinted at a significant increase in autonomous on-chain activity driven by AI agents.
He has also predicted that Ethereum will evolve into a central settlement layer. The idea is that the network becomes less of a place where humans click buttons and more of a back office where software settles its accounts.
One recent initiative is EthSystems, a project backed by Lubin that aims to provide privacy technology for institutions on Ethereum. That matters because institutions tend to want the efficiency of a shared ledger without broadcasting every transaction to competitors.
Lubin also addressed the regulatory backdrop. He said clarity is expected from the SEC and CFTC, even as legislative efforts around crypto oversight have faced delays.
That is a notable distinction. He is pointing to agencies, not Congress, as the more likely near-term source of rules, which suggests the industry may get guidance through regulators before it gets new law.
Disclosure: This article was edited by Diego Almada Lopez. For more information on how we create and review content, see our Editorial Policy.
Ethereum is stabilizing after a period of heightened volatility, with its price trading near $2,460.98, reflecting a rebound of 0.52% in the past 24 hours. The market’s attention has turned to several encouraging signals as ETH attempts to move out of correction territory and into a new phase of accumulation and potential recovery.
Short-term resistance and support levelsEthereum is rebounding from recent lows but still faces significant resistance overhead. Analysts have noted that the price continues to encounter selling pressure around $2,415, a level that has capped multiple previous rebound attempts on intraday charts. Despite these hurdles, support appears solid in the $2,370 to $2,380 range, where buyers previously stepped in following the most recent downturn.
Maintaining above this support region would help ETH build a more stable base, but a decisive move above $2,415 is needed to signal a material improvement in the short-term trend. Without such a breakout, the price may remain vulnerable to further downside retests. Should Ethereum overcome this resistance, attention is likely to shift back toward $2,500 and the next set of hurdles higher up.
Ethereum’s price has rebounded several times during the current correction, but converting resistance into confirmed support at $2,415 would be an important step in strengthening the short-term outlook.
Major whale rotates $155 million into ETHOn-chain data from Lookonchain indicates a large investor recently rotated approximately $159 million out of Bitcoin, selling nearly 1,918 BTC over 11 days, while acquiring about 64,545 ETH valued at around $155 million. This move places Ethereum at the center of large-holder accumulation, suggesting that institutional and large-scale investors are building positions amid current market weakness.
Such whale activity is often viewed as a signal of increased institutional interest, especially if the market is still searching for a recovery confirmation. The transaction amplifies demand-side momentum, reinforcing arguments for a possible trend reversal if resistance levels are reclaimed.
Mini dictionary: Lookonchain is a blockchain data analytics platform known for tracking large transactions and whale activity in the cryptocurrency markets. The service provides real-time insights into the movements of significant holders and institutional participants.
Shift in derivatives market: Longs build, shorts collapseEthereum’s derivatives market is also showing a shift in sentiment. Data from market trackers reveal a sharp reduction in ETH short positions, falling from over 14,000 to about 3,000. Simultaneously, long exposure has surged from below $100 million to about $365 million, suggesting that traders are increasingly betting on a bullish recovery as ETH stabilizes near $2,460.
MetricBeforeCurrentETH Short Positions14,000+~3,000ETH Long Exposure<$100 million$365 millionThis change places more pressure on Ethereum’s price to respond and break through resistance levels. The strong buildup in long positions and the reduction in shorts highlight growing conviction that the market could soon transition from base-building to renewed gains.
As traders increase long positions and reduce short exposure, optimism grows that ETH can build on its current base and advance toward higher levels if key resistance points are cleared.
Technical signals and long-term outlookShort-term technical indicators support the prospect for recovery. The 2-hour Relative Strength Index (RSI) has cooled to 47, indicating room for price growth, and the Moving Average Convergence Divergence (MACD) remains negative but reset after previous overbought conditions. These factors suggest that ETH could stage another move higher if buying interest returns.
Longer-term, analysts describe the $2,270–$2,500 range as a key accumulation zone, where strong hands are accumulating positions despite short-term weakness. A trend reversal and close above $3,000 to $3,300 could indicate the start of a broader expansion phase, with some roadmaps targeting $8,800 as a future objective, and a distribution zone extending toward $11,500. However, these upside targets are dependent on ETH successfully establishing a stable base and reclaiming higher resistance levels in the weeks ahead.
Key levels and what to watch nextTraders are monitoring whether Ethereum can turn its current stabilization near $2,400 into a sustained recovery. A hold above this level could trigger interest in retesting $2,455 and $2,500, benchmarks where past rallies have faltered. If ETH moves above $2,500, momentum could improve and open the door to higher targets. Alternatively, if the $2,370–$2,400 band fails to hold, focus may shift to the next support near $2,345, signaling potential for further pullbacks before recovery resumes.
Not financial or tax advice. PANews content is strictly educational and informational and is not investment advice, financial advice, tax advice, legal advice, or a solicitation to buy or sell any digital asset, security, or financial product. Do your own research and consult qualified advisers.
Disclosure. PANews may publish sponsored content, partner content, advertisements, affiliate links, event promotions, and market commentary involving Web3 projects, service providers, or financial products. PANews personnel, contributors, or affiliates may hold digital assets or other interests related to covered topics. See our Terms of Service.
Ethereum [ETH] registered its largest daily exchange outflows in over four months, with 169,770 ETH leaving exchanges as market participants anticipate a potential price rebound. Santiment Intelligence is comparing the recent withdrawals to a similar spike recorded on the 5th of June.
Following that period, Ethereum recorded roughly 223,800 ETH in net outflows as its price reached a local bottom. Subsequently, the token staged a strong price rebound, making the later withdrawal spike particularly significant to the prevailing market conditions.
For context, substantial exchange withdrawals generally limit the amount of ETH readily available for immediate selling. Therefore, this recent development reinforced expectations of a possible price recovery, even though historical patterns sometimes offer no guarantee.
Meanwhile, selling activity among Ethereum’s earliest investors introduced another important factor into the recovery story.
Ethereum OG whales cash out after years According to Lookonchain, an early Ethereum investor reportedly sold 3,000 ETH valued approximately $7.23 million. Originally, the investor purchased the tokens nine years ago at just $18.83 each, which secured a reported 128-fold return.
Beside that, another Ethereum OG separately sold 1,000 ETH after acquiring tokens during Ethereum’s initial coin offering. This investor originally purchased 100,000 ETH at around $0.31 per token. The two long-term holders together sold 4,000 ETH, which highlighted renewed selling activity among Ethereum’s earliest investors.
Even though the reported exchange withdrawals implied limited available supply, the whale transactions showed continued selling among long-term investors.
Also notably, Ethereum’s derivatives market also highlighted persistent selling pressure, beyond these individual sales.
Source: Lookonchain on X Futures sellers maintain control over ETH As per CryptoQuant analytics, Ethereum’s Futures Taker CVD continued showing seller dominance, which implied sustained aggressive selling activity. In particular, this indicator measured the cumulative divergence between market buy and sell orders across the Futures markets of ETH.
The seller-dominant reading therefore indicated that aggressive sellers continued outweighing buyers throughout the period observed. This derivatives positioning was in contrast with the considerable exchange withdrawals reported by Santiment.
Consequently, such positioning could likely invalidate recovery prospects, especially in case the aggressive Futures selling persists alongside the prevailing weak ETH price action.
Source: Ethereum Futures Taker CVD on CryptoQuant Can Ethereum defend $2,300? The daily timeframe chart highlighted continued weakness after ETH failed to sustain its earlier recovery toward the $2,540.68 price level. The altcoin subsequently pulled back toward $2,376.62, losing its key support at the $2,385.62 price level.
Notably, the latest candles highlighted repeated attempts to stabilize around this zone, but the bulls did not manage to establish a convincing rebound.
Meanwhile, the Parabolic SAR indicator remained above the prevailing market value at $2,509.93 as of writing, strengthening the current bearish structure.
Furthermore, the MACD indicator maintained a bearish crossover. Notably, the indicator’s negative histogram reading of -8.90 further validated that the bears retained the technical advantage.
Overall, the bearish technical indicators for now outweighed the bullish implications of exchange withdrawals. Unless the bulls reclaim the $2,385 support, ETH could face further price decline toward $2,300.
Source: ETH/USDT Chart on TradingView Final Thoughts Ethereum’s exchange outflows reached a four-month high, but early investors continued selling their holdings. Persistent Futures selling and bearish indicators left ETH facing another potential decline toward $2,300.
Spot Ether ETFs lost $1.2 billion in October, their worst month of the year. At the same time, Bitmine is approaching the 5% cap on the supply it set for itself. The two buyers driving the demand are withdrawing together.
In brief
Ether ETFs register $1.2 billion in net outflows in October, after $1.85 billion inflows in August and $832 million in September.
Bitmine, which has been buying weekly since June 2025, is about 63,500 ETH away from its 5% supply cap and should reach it by late November.
The network issues around 20,000 ETH per week, and the question is who will absorb it when both drivers slow down.
Ether ETF and Bitmine, the two demand drivers stall
Ether demand relied this year on two pillars, spot ETFs and Bitmine Immersion Technologies. The first turned red in October. The second is about to stop, as confirmed by Tom Lee with a hard cap set at 5% of supply.
The simultaneity is the important point. The two buyers are not only slowing at the same time; they have represented so far most of the marginal demand. Their combined withdrawal leaves a gap that adoption flows, no matter how numerous, do not mechanically fill.
From massive inflows to net outflows
The reversal is clear. Funds attracted $1.85 billion in August, then $832 million in September. October shows $1.2 billion in net outflows, at an average rate of about $357 million per week. Investors sold every trading day except two until October 22.
The weight of funds remains considerable. They hold about 6.2 million ETH, for combined net assets of $14.6 billion, a volume comparable to Bitmine’s reserves. Two portfolios of this size retreating simultaneously weigh on the order book far more than just their flows.
September was not an isolated accident. October outflows extend an earlier movement, and our October 11 article already pointed out the worst week of the year for the segment.
Who will absorb the supply
The arithmetic poses the following question. Ethereum issues about 20,000 ETH per week, and Bitmine absorbed a significant part. Over the last two weeks, the company only bought about 12,500, versus more than 100,000 per week on four occasions in April and May.
The slowdown is thus already underway, even before the cap. Bitmine has been buying weekly since June 30, 2025, without interruption, and the final pace is nothing like the start of the campaign. The company documents its weekly purchases on its website.
Two nuances prevent concluding too quickly. Ethereum’s issuance is not fixed, since a burn mechanism adjusts supply to actual network demand. And adoption flows continue, as illustrated by JPMorgan bringing its deposit token on Ethereum this week.
The fundamental question remains. No other corporate treasurer today has comparable capacity, and the ETFs, which drove demand for two months, are selling. For ether to hold until year-end, fund flows must turn positive again, or a new buyer must take over.
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Fenelon L.
Passionné par le Bitcoin, j'aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
Santiment reported that 169,770 ETH left exchanges in one day, the largest daily outflow in more than four months and a possible supply-side support signal.
A similar June 5 outflow episode preceded roughly 223,800 ETH in net withdrawals and an ETH price bottom, though that historical sequence does not ensure another rebound.
Two early Ethereum holders reportedly sold 4,000 ETH combined, including a nine-year investor who bought at $18.83 and an ICO participant who paid about $0.31.
ETH traded near $2,376.62 below $2,385 support, while futures CVD, Parabolic SAR and MACD favored sellers; a whale’s liquidation levels sat at $2,256.45 and $2,226.53.
Ethereum price faced mixed signals on Oct. 24. Exchange withdrawals accelerated, but several market measures still pointed to selling. Santiment reported that 169,770 ETH left exchanges in one day, the largest daily outflow in more than four months. Lookonchain flagged 93,184 ETH in whale long positions, valued near $214 million. The positions could face liquidation if ETH falls toward those levels.
Source: Coingecko
Lookonchain listed liquidation levels at $2,256.45 and $2,226.53. The daily chart showed ETH near $2,376.62 after it lost $2,385.62 support. That left the near-term rebound case uncertain. Traders must weigh reduced exchange supply against long-term sales and derivatives pressure for now.
Ethereum Price Gets a Supply Signal From Exchange Outflows
The outflow total evoked a Santiment comparison with June 5. After that spike, Ethereum registered about 223,800 ETH in net exchange outflows as its price formed a local bottom. ETH later rebounded, making the earlier episode relevant to traders watching supply conditions now. Still, the comparison is a historical reference, not evidence that prices will follow the same path.
Exchange outflows can reduce the ETH immediately available for sale on trading venues. They can also reflect transfers to private wallets or other activity, rather than new purchases. That limits what the market can infer from a single day’s flows.
Analysts should distinguish netflows from gross withdrawals. Santiment’s figure described net ETH leaving exchanges, while wallet transfers do not reveal who moved coins or why. The comparison with June adds context, but only later price action can show whether withdrawals preceded renewed demand. June’s rebound does not promise another similar move.
Source: Santiment
Early investor selling offered a counterpoint to the outflow signal. Lookonchain said one Ethereum investor sold 3,000 ETH worth about $7.23 million. The investor reportedly bought the coins nine years ago at $18.83 each. At the reported sale value, that represented an approximately 128-fold gain.
Another initial coin offering participant sold 1,000 ETH. That investor originally bought 100,000 ETH at around $0.31 each. Together, the two early holders sold 4,000 ETH. Those transactions show that some long-term holders are taking profits while exchange balances decline. They do not prove broad selling across the entire holder base. They weaken the idea that withdrawals confirm a bullish shift.
Ethereum Price Faces Risk From Futures Selling and Whale Leverage
CryptoQuant’s Ethereum Futures Taker CVD continued to favor sellers. The metric tracks cumulative differences between market buy and sell orders across ETH futures. A seller-dominant reading means aggressive sell orders exceeded buys during the measured period. It points to derivatives pressure, although the measure cannot forecast each move.
Source: CryptoQuant
The daily chart showed the Ethereum price below $2,385.62 after it failed to hold a recovery toward $2,540.68. The Ethereum price stood near $2,376.62, with repeated attempts to stabilize around support failing to produce a convincing rebound. Parabolic SAR remained above the market price at $2,509.93. The MACD also held a bearish crossover, and its histogram read negative 8.90.
That setup left $2,385 as a level bulls needed to reclaim. If ETH fails to recover it, $2,300 becomes a possible next downside test. The technical indicators reinforced caution, while the outflow data offered a possible supply-side counterpoint. These two signals track different market behavior and can appear at once.
Lookonchain also flagged 93,184 ETH in whale long positions, valued at approximately $214 million. It cited two liquidation levels: $2,256.45 and $2,226.53. A fall through either threshold could force positions to close. Forced closures may add sell orders to an already weak market, though liquidation figures do not guarantee execution. The levels identify where traders face risk; they do not predict that ETH will reach them.
Arthur Hayes has sold about $22.28 million in crypto from Maelstrom’s directional book. Hayes, the family office’s chief investment officer, confirmed the exit on X and plans to sit out the market.
The post is a shift from his tone earlier this month. On October 15, Hayes urged traders to go long Bitcoin (BTC) and Ethereum (ETH) and trade an eventual bailout.
What Arthur Hayes Sold, and Why He Says He LeftLookonchain data shows his biggest sale was 6,400 ETH, worth $15.2 million. Hayes also sold 14 million Ethena (ENA) for $2.76 million and 323,000 Uniswap (UNI) for $2.24 million.
Smaller sales included 1.89 million Ether.fi (ETHFI) and stakes in Aerodrome Finance (AERO), Pendle (PENDLE), and Zama (ZAMA).
Hayes then confirmed the exit in a post, citing macro and geopolitical risks.
I dumped it all. The Maelstrom directional book, took profits on $ETH, $ENA, $UNI and other shitcoins. I think we gotta go down to go up. It looks a bit dicey out there in macro and geopolitical land. Going to sit on the sidelines and wait for the all clear signal … Brrrrr
— Arthur Hayes (@CryptoHayes) October 24, 2026 Did Hayes Sell at a Profit This Time?Hayes says he took profits on ETH and ENA. Lookonchain valued his 6,400 ETH at $15.2 million, or about $2,375 per coin, though his cost for those coins is not public.
ENA offers a clearer comparison. In early August, he bought 9.05 million ENA for about $773,000, or roughly $0.085 per token.
Lookonchain valued Saturday’s ENA sale at about $0.20 per token. Still, it is unconfirmed whether the tokens sold are the same ones bought in August.
His newest bets fared worse. In mid-October, he bought Aerodrome, Pendle, and Zama tokens, Lookonchain reported.
He paid about $889,000 for them and sold them for about $856,000, based on Lookonchain’s prices at each trade. That leaves a loss of roughly $33,000.
The Slide Goes Beyond Hayes’ TokensHis exit came during a broader market downturn. Six of the seven tokens he sold are down over the past month, according to BeInCrypto Markets.
Arthur Hayes Sold Tokens’ 1-Month Price Performance. Source: BeInCrypto MarketsThe decline also puts Hayes’ earlier price targets in perspective. His September forecasts of $10,000 for ETH, $0.50 for ENA, and $2 for ETHFI remain well above current prices.
Broader market stress intensified this month. On October 15, crypto liquidations reached $942.1 million in 24 hours, with long positions accounting for 91.6% of the total.
On October 23, another selloff sent the Nasdaq down 2.6% and Bitcoin toward $81,400. Rising oil prices added to inflation concerns, putting monetary policy back in focus.
Why the Fed Is the Next TestThe Federal Reserve’s next decision, due October 28, could shape the outlook for risk assets. The Fed raised rates to 3.75%–4% on September 16, its first hike since July 2023. CME FedWatch data puts the odds of a hold at 90%.
The longer-term outlook remains uncertain. Minutes from September’s meeting showed most officials expected another hike by year-end. Hayes, by contrast, has argued that an eventual AI bailout would flood markets with new money.
His own trading history offers another reason to watch how he handles the latest exit. In August 2025, Hayes sold ETH near $3,507 and bought back nine days later at about $4,252.
A trader who copied the move would have paid roughly 21% more to reenter. For altcoin holders, the October 28 decision could help determine whether Hayes’ latest exit proves timely or premature.
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Bitcoin Treasury Company purchased nearly 136,000 BTC via preferred stock financing, exceeding 0.5% of Bitcoin's maximum supply.
Fidelity data shows that as of October 5, 2025, bitcoin treasury firms including Strategy and Strive have used related preferred stock financing to purchase 135,979 BTC, accounting for over 0.5% of bitcoin’s total maximum supply. The market size of this type of preferred stock is approximately $120 billion.
Analysts note these firms face a balancing act between using perpetual preferred stock financing to buy bitcoin and sustaining dividend payments. Perpetual preferred stock has no fixed maturity date, easing refinancing pressure and attracting income-focused investors reluctant to hold bitcoin directly. However, as issuance scales up, dividend expenses will rise.
Analysts add that sustained financing for bitcoin purchases depends on preferred stock trading at or near par value; if it trades below par, new issuances will become less attractive, and firms may lean toward buybacks.
CoinShares Head of Research James Butterfill points out that Strategy’s latest weekly report shows the firm spent $193 million to repurchase STRC, bought only 267 BTC in the same period, and raised its preferred stock repurchase authorization cap to $30 billion. He says buybacks can reduce future dividend costs, but also compete with current bitcoin purchases for capital.
Bitwise Head of Research Ryan Rasmussen forecasts that ETFs will remain a larger source of bitcoin demand in the long run, while perpetual preferred stock caters to a distinct group of income-focused investors, providing a second stream of demand support.
Butterfill believes preferred stock could amplify market cycles: it supports bitcoin purchases when financing conditions are favorable, but that support weakens when market sentiment deteriorates.
3 hours ago
A crypto whale’s $214 million ETH long positions face liquidation risk, with liquidation prices set at $2256.45 and $2226.53 respectively.
According to Lookonchain’s monitoring, if the market continues to decline, a whale’s long position of 93,184 ETH (valued at approximately $214 million) may face liquidation, with liquidation prices at $2256.45 and $2226.53 respectively.
3 hours ago
Whale's $214M $ETH Long Position at Risk of Liquidation if Market Drops
Don't forget about this massive $ETH bull!
If the market keeps dropping, this whale's 93,184 $ETH ($214M) in long positions could get liquidated.
Liquidation prices: $2,256.45 and $2,226.53.
3 hours ago
Bitcoin fell below $80,000, altcoins saw sharp pullbacks, with Q plunging over 34% and PHA and CT both dropping more than 22%.
According to HTX market data, as Bitcoin pulled back below $80,000, altcoins saw sharp declines. The following tokens recorded notable 24-hour drops: Q is priced at $0.080162, down 34.35%; PHA at $0.0499, down 24.38%; CT at $0.1619, down 22.22%; SOPH at $0.001458, down 17.95%; FARTCOIN at $0.122, down 16.78%; "4" at $0.011367, down 14.99%; WLD at $0.462, down 12.80%; and PONS at $0.2239, down 12.30%.
3 hours ago
Machi Liquidated 5 Times in 1 Hour, Account Down to ~$5K
Machi (@machibigbrother) got liquidated 5 times in just 1 hour!
He now has only ~$5K left in his account.
3 hours ago
Ethereum falls below $2,300
According to HTX market data, Ethereum has fallen below $2,300, with a 4.31% decline in the past 24 hours.
Bitcoin (BTC) slipped below $80,000 on Saturday as more than $200 million in crypto positions were liquidated within an hour. Traders betting on higher prices accounted for $191.33 million of that total.
Ethereum (ETH) fell alongside the leading crypto. BeInCrypto Markets data shows the total crypto market cap down 4.06% over the past 24 hours, at $2.72 trillion. The liquidation data shows who absorbed most of the losses.
Bullish Traders Absorb the Heaviest LossesThe hourly wave formed part of a larger 24-hour total. Data from Coinglass shows $837.12 million in liquidations over that period, hitting 227,681 traders.
Long positions made up 82.8% of that figure, or $693.05 million. Short sellers lost $144.07 million.
Bitcoin led the tally with $232.55 million, followed by Ethereum at $181.51 million. Longs accounted for more than 93% of each.
Bitcoin and Ethereum crypto liquidations heatmap over 24 hours. Source: CoinglassBinance recorded the largest single liquidation, an $11.85 million long on the ETHUSDT pair. Price data shows how far the sell-off reached beyond derivatives.
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Bitcoin Slips Under the Price Corporate Treasuries PaidBitcoin traded at $79,464 at press time, down 2.48% over 24 hours. This marked its lowest level since September 18.
Bitcoin price daily chart shows BTC below $80,000. Source: BeInCrypto MarketsAltcoins fell harder. Ethereum lost 4.71% over the same period to $2,288.73, its lowest level in about two months. Solana (SOL) dropped 5.20% to $98.92.
Zcash (ZEC) posted the steepest decline in the top 10, sliding 8.39% to $1,124.36.
Bitcoin now sits below $80,000, the average price that companies holding Bitcoin on their balance sheets paid per coin, according to Glassnode estimates. That puts the average corporate treasury position at a loss.
Earlier on Saturday, analyst Benjamin Cowen warned that a weekly close below $83,000 on October 25 would support his bearish path. He said the scenario becomes void if Bitcoin climbs back above $83,000 and holds there.
BeInCrypto’s analysis flagged $77,876 as the next downside level. Below that, a support zone sits between roughly $76,700 and $72,500.
The market has tested similar ground this month. On October 8, total crypto market cap fell to $2.69 trillion before a Trump pledge on Iran eased the pressure. Today’s $2.72 trillion sits about 1% above that floor.
Next week brings more tests. The Federal Reserve meets on October 27 and 28, and September Personal Consumption Expenditures (PCE) inflation data follows on October 29.
Brent crude also settled at $116.72 on Friday, a level that could keep inflation elevated. Whether buyers defend $77,876 before those events could decide how much room Bitcoin has left.
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The Ethereum Foundation’s Austin Griffith put about $1 behind an easy-to-guess private key, and bots tried to take it within seconds.
Austin Griffith shows bots draining a wallet with a guessable private key
Posted October 23, 2026 at 8:35 pm ET.
Austin Griffith of the Ethereum Foundation put about $1 in an Ethereum wallet whose private key was the number 6969, and bots went after it almost at once. “As soon as the dollar landed, there were three transactions in the mempool pending trying to steal it,” Griffith said on Oct. 21 on Uneasy Money, the Unchained show he co-hosts.
A private key is the secret number that controls a wallet, so anyone who guesses it can move the funds. Griffith ran the test after a security failure at eMudhra, an Indian certificate authority. A disclosure site for the incident, set up by Mozilla’s Dennis Jackson, said the keys behind eight eMudhra intermediate certificates, created in April 2025, had been compromised, and researcher Scott Helme wrote that each was a number below 256, one of them 4. Firefox and Chrome blocked the certificates on Oct. 17, the day the problem was reported, and Microsoft followed on Oct. 20. On Oct. 22, after the episode was taped, eMudhra said it would leave the global SSL/TLS certificate business.
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What the Chain Shows
On-chain records reviewed by Unchained show that 0.0004 ETH, about $1, reached the address for key 6969 at 20:35 UTC on Oct. 21 in a deposit. A transaction signed with that same key moved it out in the next block, 12 seconds later, and spent most of the deposit on network fees. Transactions from three other addresses hit the wallet just after, and two of them failed. The deposit came from a wallet named slop.atg.eth, which was funded by austingriffith.eth.
Griffith also said “there’s not a number less than 256 that doesn’t already have a nonce,” the counter of transactions an address has sent. Unchained checked the addresses for all 255 such keys, 1 through 255, on Ethereum mainnet, and every one has sent transactions.
Testing Longer Keys
Before the result came in, Griffith guessed that bots would stop finding keys somewhere “between eight and 12” digits. Later in the episode, he said 10-digit keys were drained “right away,” while 12-digit keys had “not yet” been drained. He said he had also seeded a 14-digit key and a 16-digit key, “looking for someone to steal my dollar.”
Griffith did not name those keys, and Unchained could not independently check which ones he used. On-chain records show slop.atg.eth funded four more addresses about 14 minutes after the first deposit. One was emptied within 12 seconds, and three still held their funds as of Oct. 23, but the records do not show which key length each belongs to.
The hosts said they would check next week whether the 14- and 16-digit keys had been drained.
Related Listen: Uneasy Money: Is the Internet Breaking Because Bots Never Get Lazy?
AI-assisted content: This article was produced with the assistance of AI tools and was reviewed, edited, and fact-checked by a member of the Unchained editorial team before publication.
Co-founder Zon's preliminary read points to a MoveVM flaw, while D2 Finance traced the payouts to LayerZero adapters on Ethereum.
Initia's chain stays halted after an attacker minted and bridged out tokens
Posted October 23, 2026 at 10:35 pm ET.
Anyone holding assets on Initia is waiting on a restart. Initia’s layer 1 and its rollups have been offline since 11:41 a.m. ET on Friday, when the team cited a “security incident,” and it had not said when they would come back as of 5:52 p.m. ET. Initia said in the same notice that it was working “to establish the full scope of any impact with security teams, validators, and exchanges.”
Co-founder Zon pointed to Initia’s own software, citing preliminary findings. He wrote that it was “a Day 0 bug related to Initia’s MoveVM on CosmosSDK that allowed the exploiter to mint additional tokens on the Initia L1 but does not apply to native INIT tokens.” The attacker managed to “mint and bridge out ~$2.7m worth of AUSD, ETH, and USDC before the chain was paused,” he added.
Pseudonymous researcher Spreek flagged the attack at 11:27 a.m. ET, 14 minutes before the halt, estimating $2.6 million cashed out.
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How the Funds Left D2 Finance, which published a breakdown of the transactions, said one transaction at 10:59 a.m. ET minted 2 million AUSD on the Initia side. By D2’s account, those unbacked tokens were burned and sent over LayerZero to Ethereum, where OFT adapters, lockbox contracts holding the real tokens behind Initia’s bridged versions, paid out. D2 wrote that “an OFT adapter cannot check whether burned tokens were ever backed.”
D2 said the attacker pulled 1.4 million AUSD, 71% of the AUSD adapter’s holdings, leaving about 576,000, plus 105 ETH, 96% of the native-ETH adapter. Another 1.08 million USDC arrived as new mints through Circle’s CCTP. In D2’s telling, $2.65 million had reached Ethereum within seven minutes and 21 seconds of the mint.
Agora Says AUSD Is Unaffected Agora, which issues AUSD, said at 12:57 p.m. ET that it “has no smart contracts deployed on Initia.” At 2:26 p.m. ET it added that “AUSD does not exist on Initia,” and that “AUSD is fully backed.” Agora’s statements indicate the token minted on Initia was a bridged representation rather than AUSD itself. D2 said the AUSD that left came from an Ethereum lockbox adapter backing that bridged token.
Onchain records show the 1.4 million AUSD sat in the attacker’s Ethereum address for about 84 seconds before it was traded away on the 1inch aggregator at 11:03 a.m. ET. Agora froze that address at 12:31 p.m. ET, roughly 89 minutes later and before its first statement, when the address held no AUSD.
The same address sent 1,135.5 ETH, which D2 valued at about $2.7 million, to a newly used wallet at 11:41 a.m. ET, the minute the halt took effect.
Initia’s own account has not confirmed Zon’s loss figure or published a post-mortem. It said it would post verified updates through its official channels.
Related Listen: Who’s to Blame for How KelpDAO’s DVN Was Set Up? KelpDAO or LayerZero?
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Austin Griffith, a developer associated with the Ethereum Foundation, conducted an experiment by depositing approximately $1 worth of ETH into an Ethereum wallet secured with the private key set to the number 6969. Shortly after the funds arrived, automated bots began targeting the wallet, attempting to drain its contents almost immediately. Griffith discussed the results on the “Uneasy Money” segment of the Unchained podcast, which he co-hosts.
Rapid bot activity targets weak private keysOn-chain data confirmed that 0.0004 ETH, equivalent to about $1, was sent to the address corresponding to the key 6969 at 20:35 UTC on October 21. Within just 12 seconds, a transaction using the same key moved the funds out, with most of the deposit consumed by network fees. Three other addresses sent transactions to this wallet in rapid succession, but two attempts were unsuccessful.
Griffith’s deposit originated from a wallet labeled slop.atg.eth, which itself received funding from the austingriffith.eth address. This quick sequence of events showcased the vigilance of automated systems designed to monitor and exploit wallets with weak private keys.
On the show, Griffith observed that as soon as the deposit landed, three transactions were immediately pending in the mempool attempting to steal the funds.
He further remarked, “there’s not a number less than 256 that doesn’t already have a nonce,” indicating that all straightforward, low-number Ethereum private keys have been used to send transactions—suggesting near-complete scans by automated programs.
Mini dictionary: Mempool – Short for “memory pool,” this is a collection of unconfirmed transactions waiting to be mined into blocks on a blockchain network.
Testing key lengths and bot responsesAhead of the experiment, Griffith predicted that automated bots would likely stop actively searching for easy-to-guess keys somewhere between eight and twelve digits. However, he later updated his findings, stating that wallets with 10-digit keys were emptied “right away,” while those with 12-digit keys remained untouched at the time of the discussion. He also mentioned having seeded wallets with 14-digit and 16-digit private keys as part of the ongoing test, intentionally inviting would-be attackers by depositing small amounts.
Griffith did not make public the exact values of these longer private keys. A review of on-chain records by Unchained showed that slop.atg.eth funded four additional wallet addresses about 14 minutes after the initial deposit. Of these, one wallet was emptied within 12 seconds, while three continued to hold their funds as of October 23. The particular key lengths associated with these addresses were not specified.
The podcast hosts noted their intention to follow up the following week to determine whether the 14- and 16-digit key wallets remained secure or were eventually compromised by bots.
Griffith stated that during his investigation, every private key from 1 up to 255 had already sent at least one transaction on the Ethereum mainnet, underscoring the thoroughness of automated scanning.
Automated scanning of simple keys on EthereumEthereum transactions utilize private keys, usually long and randomly generated, to secure assets. Using predictable or short private keys makes wallets susceptible to attacks by bots that systematically search for vulnerable credentials. This experiment highlighted the prevalence and speed of such automated tools on Ethereum’s main network.
The results demonstrate that Ethereum mainnet wallets with very short, simple keys are immediately targeted and drained, often within seconds, which points to persistent surveillance by wallet-draining bots. More complex keys with greater length appeared to evade immediate discovery, but the experiment is ongoing to determine their eventual safety.
The story originates from a segment addressing whether bots are compromising the openness of the internet by automating vast portions of network activity.
US retail investors’ bottom-fishing in semiconductor leveraged ETFs takes a hit, with SOXL plunging 20.5% in a single day.
FactSet data shows that Direxion Daily Semiconductor Bull 3X Shares (SOXL) drew $6.1 billion in inflows last week, a new single-week record. Investors were betting on a rebound in chip stocks, but SOXL still dropped 10.8% this week, marking its third straight weekly decline, with a cumulative fall of over 43% since October. Inflows continued through Thursday, but SOXL plunged 20.5% that day, its largest single-day drop since June 23. By comparison, non-leveraged iShares Semiconductor ETF (SOXX) fell 6.8% on the same day, with a cumulative decline of around 15.9% since October. SOXL uses derivatives to track three times the daily performance of the semiconductor index, amplifying both gains and downside risks. The semiconductor sector is under pressure mainly due to market skepticism about the return on investment in AI infrastructure. Investors are reassessing whether tech giants’ aggressive spending can meet earnings expectations. Earlier, AI chip demand lifted semiconductor stocks, with SOXX’s year-to-date gain once nearing 59%, but recent sell-offs have tested its rally. Mike Reynolds, vice president of investment strategy at Glenmede, noted that semiconductors are highly sensitive to AI infrastructure development, and AI-related trades are currently facing some doubt. He added that after strong stock rallies and valuation expansions, investors’ re-examination of the AI theme’s potential returns is a healthy market move. Meanwhile, all three major U.S. stock indexes closed lower on Friday, with the S&P 500 Information Technology sector falling for the third consecutive week, its longest weekly losing streak since March.
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Initia discloses details of the MoveVM vulnerability attack, suffering losses of approximately $2.7 million, while the INIT token supply remains unaffected.
Initia disclosed that at 22:59 Beijing time on October 23, attackers exploited a MoveVM script cache vulnerability to bypass security checks, forging states to add unsupported WETH, iUSD, and USDC balances to their accounts without altering the total supply of the respective tokens. The native INIT token was not minted, and its total supply remained unaffected. Before the network was shut down, the attacker transferred 105 WETH and approximately 1.4 million AUSD0 via LayerZero, and around 1.08 million USDC via Noble and CCTP, with total assets valued at roughly $2.7 million. These assets have been converted into 1135.52 ETH. Initia's L1 and Rollups remain suspended. The team is fixing the vulnerability, with repairs and audits expected to be completed within days, and is working with security partners to recover the stolen assets. The official added that a full incident analysis report will be released later, and reminded users to beware of unofficial links, messages, and statements.
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Analyst: Bitcoin has seen notable pullbacks in every prior U.S. midterm election cycle, and its key support level of $73,000 requires close attention.
Crypto analyst Ali Charts wrote in a post that as the November 3 US midterm elections approach, investors may overlook the recurring Bitcoin pullbacks seen in previous election cycles. He believes this election could again bring significant volatility, with downside risks worth noting, and his key support level to watch is $73,000. According to his statistics, Bitcoin saw pullbacks of 72%, 65%, 52%, and 27% during the US midterm election cycles in 2010, 2014, 2018, and 2022 respectively. However, he emphasized that correlation does not equal causation; the elections themselves may not be the cause of the drops, and these pullbacks are also influenced by Bitcoin’s overall market cycle, liquidity conditions, and investor sentiment.
Q4 returns show a similar pattern: Bitcoin fell 16.70%, 42.16%, and 14.75% in Q4 of 2014, 2018, and 2022 respectively. The only exception was 2010, when it rose 391%—though Bitcoin was still in its early stages back then. As a result, three of the past four midterm election years saw negative Q4 returns.
Regarding future price action, Ali Charts noted that the $73,000 level is near the average acquisition cost of Bitcoin’s current short-term holders, making it a key area to monitor the positioning of recent investors. He pointed out that in an established bull market, Bitcoin often finds support near the short-term holder average cost after a significant pullback. He believes that if selling pressure accelerates after the November 3 elections, pushing Bitcoin back toward $73,000, this zone will be a critical level to test whether buyers are still willing to uphold the overall bullish trend. If prices rebound sustainably from this area, it will reinforce the bullish thesis. For trading, he will wait for signs of selling pressure drying up and demand reemerging before considering opening long positions.
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SpaceX’s $40 billion off-balance-sheet debt financing is facing pressure on pricing negotiations amid turmoil in the AI market.
According to Bloomberg, citing people familiar with the matter, SpaceX is negotiating a $40 billion off-balance-sheet debt financing plan, which would use a special purpose vehicle (SPV) to purchase Nvidia chips to support its AI business expansion. The structure is designed to keep the related liabilities off SpaceX’s balance sheet, preserving its investment-grade credit rating. However, recent turmoil in the AI sector has pushed up industry borrowing costs, complicating pricing negotiations. Banks led by Goldman Sachs are discussing the plan with investors led by Apollo; Apollo-backed Atlas SP would manage the entity, with Pimco also considering participation.
Previously, yields on some subordinated debt were discussed in the mid-8% to 9% range, but recent volatility has prompted investors to reevaluate pricing, and the two sides remain in talks. SpaceX’s financial filings this week also revealed that last year, xAI had attempted to raise up to $20 billion in off-balance-sheet debt via a sale-leaseback arrangement with Valor Equity Partners. Auditors classified the deal as a “failed sale-leaseback arrangement”, leading SpaceX to eventually record roughly $13 billion of the sum as its own debt. The proposed structure aims to avoid a repeat of that outcome.
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South Korean stock market's retail war chest shrank by 36.5%; retail investors continued net buying, but capital replenishment has slowed.
Data from Korea Financial Investment Association shows that as of October 22, investor deposits at South Korean securities firms fell to 88.68 trillion won, a drop of around 51 trillion won from the all-time high of 139.69 trillion won recorded on June 4, representing a 36.5% decline and returning to levels seen at the start of the year. The balance dipped below 90 trillion won on October 21, marking the first such drop in nearly nine months.
Investor deposits refer to funds held in securities firm accounts that have not yet been used to purchase assets such as stocks, and are typically viewed as potential buying power. The decline in the balance can stem from either stock purchases or fund withdrawals, so the full drop cannot be equated to capital exiting the stock market.
Retail investors continue to make net purchases. Between June 4 and October 23, individual investors bought a net 44.17 trillion won in the KOSPI market and 3.15 trillion won in the KOSDAQ market, while net purchases of ETFs over the same period reached 28.25 trillion won. The report notes that unlike the first half of the year, where new capital inflows exceeded stock purchases, the pace of capital replenishment in the second half has lagged behind outflows, leading to the continuous decline in deposit balances.
The KOSPI index closed at 5550.30 points on October 23, having fallen nearly 20% over the past month. A securities industry official said the recent decline is indeed excessive relative to earnings fundamentals, but the AI sector, which previously drove gains, still faces credit risk concerns, making it too early to expect a sustained rebound.
2 minutes ago
Renowned Trader: Bitcoin Should Add Positions Instead of Panicking When It Hits $80,000 'Buy Zone'
Renowned crypto trader Doctor Profit stated in a post that every time Bitcoin hits its "buy zone", it is an opportune moment to add to existing long positions, and he is currently executing this strategy. His accompanying chart labels the area near $80,000 as the "buy zone", emphasizing: "This zone is for buying, not panicking."
Ethereum’s [ETH] deflationary edge over Bitcoin may be fading.
Since the merge, 55.4% of the newly issued ETH has been burned. However, this number has dropped significantly to only 2.7% over the last thirty days. In addition, ETH’s yearly supply growth has increased to 0.86%, which is almost Bitcoin’s 0.82%. That’s a sharp pullback in ETH burning, impacting its scarcity argument and potentially challenging the long-term bullish thesis versus BTC.
So, with ETH’s deflationary narrative being challenged, its next leg higher could increasingly rely on demand for Ethereum’s Layer 1 block space. As the chart below shows, gas prices have dropped from 2.76 Gwei to just 0.03 Gwei in two days, fueling the “Is ETH the new SOL?” debate. But cheaper prices are not always good, as they can also signal weaker demand for the block space.
Source: EtherScan Notably, this is where a key on-chain metric comes into play.
According to CryptoQuant data, Ethereum Velocity is at 11.03, implying that ETH is circulated actively on the blockchain. Moreover, the number of active addresses has hit 627k, suggesting growing adoption. And if the demand is sustained on a declining gas fee, the cost to transact on ETH will remain cheap despite active use.
In this context, declining gas fees could be a bullish sign, which brings ETH/BTC back to the forefront. While Ethereum’s deflationary edge is being eroded, strong Layer 1 activity could offset it. The important question is whether ongoing on-chain demand will catalyze a rebound in ETH/BTC. In turn, translate into a stronger relative performance against Bitcoin [BTC].
Ethereum’s bullish positioning raises hopes of BTC outperformance The divergence between ETH’s technical and fundamental setup is growing interesting.
While the overall whale activity seems to be cooling, the Bitfinex whales’ ETH long positions are rising sharply, suggesting smart money is positioning for further upside. Meanwhile, ETH/BTC is also showing a pattern similar to its pre-altseason setup in 2021, forming higher highs and retesting its trendline.
On-chain data adds another bullish sign. According to Santiment, about 169k ETH left exchanges on a net basis. This marked the largest daily outflow in more than four months. A similar development occurred on the 5th of June when roughly 223,800 ETH left exchanges as ETH reached its lowest price since the beginning of April 2025, only to climb rapidly in the following days.
Source: Santiment Taken together, strong network activity, rising whale longs, and a significant ETH exchange outflow make up Ethereum’s bullish case. Should ETH/BTC follow the same pattern as it did in 2021 ahead of the altseason, another breakout could be on the way.
The logic is simple: While Ethereum’s advantage over Bitcoin in terms of deflationary properties has weakened, an increase in layer 1 demand, rising whale longs, and ongoing exchange outflows may create conditions for a supply squeeze. Taken together, these factors suggest ETH could be building momentum for a potential breakout against BTC once the market turns back to risk-on.
Final Summary Rising Ethereum activity could support ETH’s recovery against BTC.
Whale longs and ETH outflows could help Ethereum outperform Bitcoin when market sentiment improves.
Pi Network (PI) is down 2% today, October 24, to trade at $0.078 at the time of writing. This dip mirrors the downtrend across the broader crypto market, where the total market cap has fallen by 1.37% to $2.7 trillion.
Bitcoin (BTC) had dropped below $81,000 at the time of writing, while Ethereum also fell below $2,400. Following this drop, PI is now inching close to a make-to-break support despite a recently launched desktop upgrade.
Pi Core Team Rolls Out Major Desktop Upgrade In an X post, the Pi Core team noted that the network had released Desktop Version 0.6.4. The upgrade targets SoloHost apps to ensure that pioneers can access apps such as local AI agents through their phone’s Pi Browser.
The team notes that this upgrade will not only boost accessibility to SoloHost apps but also increase security by checking the access rights on apps before they are installed and every time that they start.
This upgrade comes ahead of the first-ever Pi Ecosystem Summit that will take place between November 17 and 19, as earlier reported by CoinGape. During this summit, the Pi Core team has said it plans to unveil new features and platforms.
Pi Network also recently rolled out the Protocol 28 upgrade on the mainnet on October 16, as earlier reported by CoinGape. The upgrade sought to improve network efficiency and smart contract management.
Pi Network Price Defends Crucial $0.077 Support as AO Bars Hint at a bullish Divergence Pi Network price remains above the crucial support level at $0.077 despite the recent surge in selling pressure. The altcoin has not closed below this support since mid-July suggesting that buyers view this price to be a good entry point.
However, the uncollected liquidity below this price could act as a magnet that pulls Pi Network down.
If selling pressure increases, Pi Coin price might drop to collect liquidity $0.074. An extended dip below this price might see bears test support at the psychological all-time low of $0.070.
On the upside, there is a FVG gap between $0.083 and $0.086. Pi Network price needs to close above the midline of this FVG gap at $0.084 to confirm a bullish future Pi Coin price outlook. If PI tests the resistance at $0.084 and fails to close above it, it could suggest that the bears remain in control.
Source: TradingView The AO bars that have turned green despite the recent drop in price are creating a bullish divergence as bearish pressure fades.
However, the ADX line supports the bearish thesis, with its movement north suggesting that the uptrend is gaining strength.
In May 2023, the Ethereum blockchain faced its first inactivity leak, a mechanism designed to restore chain finalization amid prolonged network disruptions. This feature aims to reduce the voting power of validators who become unreachable, redistributing their power to active validators. Our investigation delves into the safety implications of this inactivity leak within the Ethereum blockchain. Through theoretical analysis, we explore how Byzantine validators might expedite the finalization of conflicting branches or reach a voting power exceeding the critical safety threshold of one-third. Additionally, we revisit the probabilistic bouncing attack, demonstrating how the inactivity leak might allow Byzantine validators to breach safety thresholds. This article uncovers how penalizing inactive nodes can undermine blockchain properties, especially when Byzantine validators can coordinate their actions.
I. Overview
Background
In September 2022, Ethereum transitioned from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) protocol. This change aimed to improve energy efficiency and scalability. The Ethereum PoS protocol is unique due to its hybrid nature, combining elements of classical Byzantine Fault-Tolerant (BFT) Consensus with the Nakamoto-style blockchain framework. In BFT blockchains, validators explicitly vote on block proposals, ensuring that once a block is added, it remains permanently incorporated. In contrast, Nakamoto-style blockchains allow forks but eventually reconcile to a single chain.
Motivation
The motivation behind this study stems from Ethereum's introduction of the inactivity leak, a penalty mechanism designed to address prolonged network disruptions. When validators become unreachable, their voting power is reduced and redistributed to active validators. While this mechanism aims to restore chain finalization and maintain liveness during network partitions, it raises significant concerns about its impact on the blockchain's safety. Specifically, the potential for Byzantine validators to exploit the inactivity leak to expedite the finalization of conflicting branches or gain a voting power exceeding the critical safety threshold of one-third necessitates a thorough investigation.
Contributions
This article is mainly based on the many sources, one of our main contents came from Byzantine Attacks Exploiting Penalties in Ethereum PoS from authors: Ulysse Pavloff, Yackolley Amoussou-Genou, Sara Tucci-Piergiovanni
This paper makes several key contributions:
Formal Analysis of the Inactivity Leak: They provide the first formal description of the inactivity leak, detailing its operational mechanics and its intended purpose within the Ethereum PoS protocol.
Impact on Safety: Our analysis explores various configurations and scenarios to understand how the inactivity leak influences the safety of the Ethereum blockchain, particularly under the influence of Byzantine validators.
Revisiting Known Attacks: We reexamine the probabilistic bouncing attack in the context of the inactivity leak, demonstrating how this attack can be leveraged to probabilistically breach safety thresholds.
Theoretical and Practical Insights: The findings offer valuable insights for both theoretical research and practical implementations of penalty mechanisms in PoS blockchains.
Organization of the Paper
The paper is structured to provide a comprehensive exploration of the inactivity leak and its implications. The organization is as follows:
Introduction: An overview of the motivation, contributions, and structure of the paper.
System Model and Ethereum Protocol: A detailed description of the Ethereum PoS protocol, including its safety and liveness trade-offs, Byzantine fault tolerance, and the inactivity leak mechanism.
Analysis of Safety Loss Scenarios: An in-depth analysis of scenarios where safety might be compromised, including conflicting finalization with honest validators and coordinated Byzantine attacks.
Revisiting the Probabilistic Bouncing Attack: A thorough reexamination of the probabilistic bouncing attack, assessing its impact in the presence of the inactivity leak and presenting simulation results.
Future Work: A discussion of the implications of our findings for Ethereum and other PoS blockchains, along with directions for future research.
Conclusions: A summary of our findings, emphasizing the importance of refining penalty mechanisms to ensure blockchain safety and stability.
II. System Model and Ethereum Protocol
Ethereum PoS Protocol Overview
Ethereum's shift to proof-of-stake (PoS) in September 2022 was a landmark event, transitioning from the energy-intensive proof-of-work (PoW) to a more sustainable and scalable consensus mechanism. The Ethereum PoS protocol combines elements of classical Byzantine Fault-Tolerant (BFT) Consensus with the Nakamoto-style blockchain, creating a hybrid model. In this system, validators are selected based on their stake to propose and validate new blocks, aiming to achieve consensus through voting. The protocol leverages a fork-choice rule to determine the canonical chain from a tree-like structure of blocks, ensuring that the blockchain can adapt and reconcile forks to maintain a single chain.
Safety and Liveness Trade-offs
In the context of blockchain protocols, safety and liveness are critical properties that need to be balanced. Safety ensures that the blockchain does not fork, meaning that once a block is finalized, it cannot be revoked. Liveness, on the other hand, ensures that the blockchain continues to grow and accept new transactions.
BFT Consensus: BFT blockchains achieve safety by using super-majority quorums to finalize blocks, preventing forks but potentially halting growth during network partitions or failures. This trade-off means that while the blockchain is safe, it may not always be live.
Nakamoto-style Blockchains: These blockchains are designed to remain live even during network disruptions, as they allow for the existence of multiple forks. Eventually, they reconcile to a single chain, but this means they can experience temporary forks, which poses a challenge to safety.
Ethereum PoS: Ethereum PoS aims to balance these trade-offs by maintaining a finalized chain alongside a forkable chain. The finalized chain is protected by BFT mechanisms, ensuring safety, while the forkable chain continues to grow, ensuring liveness.
Byzantine Fault Tolerance
Byzantine Fault Tolerance (BFT) is a critical aspect of blockchain security, ensuring that the protocol can withstand malicious actions by up to one-third of the validators. In BFT systems, validators vote on proposed blocks, and a block is only considered finalized if it receives votes from a super-majority of validators. This mechanism ensures that even if some validators act maliciously or become unreachable, the blockchain can still achieve consensus and finalize blocks.
Inactivity Leak Mechanism
Definition and Purpose
The inactivity leak is a penalty mechanism introduced to handle scenarios where validators become inactive or unreachable due to network disruptions. When validators fail to participate in the consensus process for an extended period, their stake and voting power are gradually reduced. This reduction is intended to reallocate voting power to active validators, thereby restoring the blockchain's ability to achieve finalization and maintain liveness.
Impact on Voting Power
The inactivity leak directly affects the distribution of voting power among validators. By penalizing inactive validators, the mechanism ensures that the remaining active validators have increased influence in the consensus process. This reallocation is crucial for restoring liveness during network partitions, as it allows the blockchain to continue finalizing blocks despite the absence of some validators. However, this mechanism also introduces potential risks, particularly if Byzantine validators can exploit it to gain a disproportionate amount of voting power.
Restoring Liveness: During network partitions or disruptions, the inactivity leak helps maintain liveness by reducing the influence of inactive validators and empowering active ones to continue finalizing blocks.
Risks to Safety: The redistribution of voting power can create scenarios where Byzantine validators, through coordinated actions, may exploit the inactivity leak to increase their influence. This can lead to safety breaches, such as the finalization of conflicting chains or exceeding the critical one-third threshold of Byzantine voting power.
Ethereum's Unique Hybrid Model
Ethereum PoS's hybrid model of maintaining a finalized and non-finalized chain within a single data structure aims to offer the best of both BFT and Nakamoto-style blockchains. The finalized chain guarantees safety, ensuring that once a block is finalized, it remains unaltered. The non-finalized chain allows for continued growth and transaction processing, ensuring liveness even during adverse network conditions.
The Ethereum PoS protocol's innovative combination of BFT and Nakamoto-style elements, along with the introduction of the inactivity leak, represents a significant advancement in blockchain technology. However, this complexity also introduces new challenges, particularly regarding the balance between safety and liveness and the potential exploitation by Byzantine validators. Understanding these dynamics is crucial for ensuring the robustness and security of the Ethereum blockchain.
III. Analysis of Safety Loss Scenarios
Conflicting Finalization with Honest Validators
Network Partitions and CAP Theorem
Network partitions can disrupt the Ethereum blockchain's operation, potentially leading to conflicting finalization of blocks. The CAP theorem, which states that a distributed system can only achieve two out of three properties—consistency, availability, and partition tolerance—underlines the challenge of maintaining both safety and liveness during network partitions. In Ethereum PoS, this means that while efforts are made to maintain liveness by allowing the chain to continue growing, safety can be compromised if different parts of the network finalize conflicting blocks independently.
Independent Finalization on Different Chains
During network partitions, validators in different network segments may finalize different blocks independently. This situation arises when validators in one partition finalize one set of blocks, while validators in another partition finalize a different set. As a result, the blockchain can face conflicting finalization, where multiple chains claim to be the valid continuation of the blockchain. This scenario challenges the blockchain's safety guarantees, as transactions on conflicting branches may lead to inconsistencies and potential double-spending.
Byzantine validators can exploit network partitions and the inactivity leak to accelerate conflicting finalization intentionally. In scenarios where Byzantine validators strategically coordinate their actions, they can exploit the reduced influence of honest validators (due to network partitions or penalties from the inactivity leak) to finalize conflicting blocks quickly. This coordinated action undermines the blockchain's safety guarantees, as it introduces uncertainty about the true state of the blockchain.
Breaching the Safety Threshold
Another significant risk arises when Byzantine validators coordinate to exceed the critical one-third threshold of voting power. In Ethereum PoS, maintaining safety relies on ensuring that less than one-third of validators are Byzantine. However, if Byzantine validators can increase their influence through strategic actions during network disruptions or by exploiting the inactivity leak, they may collectively control more than one-third of the voting power. This breach of the safety threshold can lead to irreversible decisions and compromises the integrity of the blockchain.
IV. Revisiting the Probabilistic Bouncing Attack
Original Attack Description
The probabilistic bouncing attack is a known strategy in blockchain environments, particularly relevant in proof-of-stake (PoS) protocols like Ethereum. This attack exploits periods of network uncertainty or synchronization to delay block finalization intentionally. Validators participating in the consensus process strategically withhold their votes or propose conflicting blocks, leading to prolonged ambiguity about which chain should be considered the canonical one. By introducing delays in the finalization process, the attack undermines the blockchain's liveness guarantees, as transactions may remain pending or reversible for extended periods.
sources: arxiv.org
Impact of the Inactivity Leak
The introduction of the inactivity leak mechanism amplifies the effectiveness of the probabilistic bouncing attack. This penalty mechanism penalizes validators who become inactive due to network disruptions or strategic inactivity. As inactive validators lose stake and voting power over time, active validators gain a disproportionate influence in the consensus process. This redistribution of voting power alters the dynamics of the blockchain's security model, potentially creating opportunities for malicious actors to exploit.
In the context of the probabilistic bouncing attack, the inactivity leak exacerbates the impact during periods of network synchrony. Byzantine validators can strategically become inactive to avoid penalties and then coordinate attacks when network conditions are favorable. By delaying finalization through strategic inactivity and subsequent coordinated actions, malicious validators can prolong uncertainty about the blockchain's state, further compromising its liveness and integrity.
Conditions for Safety Threshold Breach
Our analysis identifies specific conditions under which the probabilistic bouncing attack, augmented by the inactivity leak, can breach the safety threshold of Ethereum PoS. These conditions include prolonged network partitions, strategic coordination among Byzantine validators to exploit penalties, and the operational mechanics of the inactivity leak itself. The combination of these factors creates a scenario where Byzantine validators can probabilistically control the blockchain's decision-making process, potentially leading to irreversible decisions or conflicting finalizations.
Simulation Results and Discussion
Simulation studies provide empirical evidence of how the probabilistic bouncing attack, enhanced by the inactivity leak, impacts Ethereum's safety and liveness properties. By modeling various attack scenarios and network conditions, we illustrate the potential vulnerabilities introduced by the inactivity leak and the strategies employed by Byzantine validators to exploit them. Discussions delve into the implications of these findings for blockchain security and propose strategies for mitigating the risks posed by such attacks.
source: arxiv.org
V. Future Work
Summary of Findings
Our study has highlighted significant vulnerabilities in Ethereum's proof-of-stake (PoS) protocol, particularly concerning the probabilistic bouncing attack and the inactivity leak mechanism. These findings underscore the importance of enhancing blockchain security while maintaining robustness in consensus mechanisms. We have identified critical areas where future research and development efforts can focus to address these challenges effectively.
Implications for Ethereum and Other PoS Blockchains
The implications extend beyond Ethereum to other PoS blockchains that utilize penalty mechanisms and face similar security challenges. Understanding these vulnerabilities provides a foundation for improving the design and implementation of future blockchain protocols. Key implications include:
Security Enhancements: Develop more resilient penalty mechanisms that mitigate the risks posed by Byzantine attacks and strategic network disruptions.
Consensus Protocol Optimization: Refine consensus algorithms to improve their ability to handle network partitions and maintain safety and liveness guarantees simultaneously.
Governance and Protocol Design: Implement governance structures that can adapt dynamically to emerging threats and vulnerabilities, ensuring continuous improvement and adaptation of blockchain protocols.
Directions for Future Research
Future research efforts should prioritize the following areas to advance blockchain security and resilience:
Enhanced Penalty Mechanisms: Investigate novel penalty mechanisms that discourage malicious behavior while incentivizing active participation and network stability.
Dynamic Governance Models: Explore governance frameworks that enable swift responses to security threats, including protocol upgrades and adjustments to consensus rules.
Formal Verification and Security Audits: Conduct rigorous formal verification and security audits of blockchain protocols to identify and mitigate potential vulnerabilities before deployment.
Cross-Chain Interoperability: Address interoperability challenges between different PoS blockchains to foster collaboration and enhance overall blockchain ecosystem resilience.
Related Work and References
Our study builds upon existing research in Ethereum PoS, Byzantine fault tolerance, and consensus algorithm design. Further exploration into related work can provide deeper insights and inspire innovative solutions to address current and future challenges in blockchain security.
Conclusion
Our exploration of the probabilistic bouncing attack and the inactivity leak in Ethereum PoS has underscored critical vulnerabilities that require immediate attention. By focusing on enhancing security mechanisms, optimizing consensus protocols, and fostering collaborative research, the blockchain community can strengthen the resilience of PoS blockchains against malicious actors and network disruptions. Through these efforts, we aim to contribute to the evolution of blockchain technologies towards more secure, efficient, and trustworthy decentralized systems.
The tokenization of Real-World Assets (RWA) is no longer a distant vision, it’s unfolding rapidly on Ethereum, where stablecoins, tokenized Treasurys, and institutional funds are driving record adoption. Last week alone, Ethereum’s stablecoin supply expanded by $5 billion, pushing circulation to an all-time high of $165 billion.
This surge highlights a fundamental shift: digital assets are becoming the infrastructure of global finance. As trillions in RWAs prepare to move on-chain, one critical question emerges, can today’s infrastructure deliver the audit-grade trust, compliance, and scalability that institutions require?
This is where Orochi Network, the world’s first audit-grade data infrastructure for RWA tokenization, provides the missing layer, transforming raw data into provable, verifiable data through its flagship platform, zkDatabase.
Ethereum’s Stablecoin Momentum In just one week, Ethereum’s stablecoin supply surged by nearly $5 billion, pushing circulation to an unprecedented $165 billion. This milestone not only cements Ethereum’s role as the hub of stablecoin liquidity but also underlines its dominance in the broader Real-World Asset (RWA) tokenization landscape. Today, Ethereum holds over 57% of the stablecoin market, while also powering a growing wave of tokenized gold, U.S. Treasurys, and institutional funds.
But as more RWAs and stablecoins flow on-chain, one challenge grows louder: infrastructure bottlenecks. Ethereum can secure transactions, but it cannot guarantee audit-grade data integrity, cross-chain compliance, or privacy-preserving verification of real-world assets.
This is where Orochi Network and its flagship platform, zkDatabase, redefine the standards for tokenization infrastructure.
Source: Tokenterminal
The Stablecoin Boom and the Next Frontier - RWAs Stablecoins are no longer just a crypto-native tool. They are the bridge between traditional finance and decentralized finance (DeFi):
Payment rails: USDC and USDT dominate remittances and settlement.
Trading collateral: Nearly all DeFi derivatives rely on stablecoins for liquidity.
Onboarding traditional finance: Tokenized money-market funds and Treasurys are now live on Ethereum.
This success, however, points to the next big wave, RWA tokenization. Institutions like Fidelity and Franklin Templeton are experimenting with tokenized funds on Ethereum. Real estate, commodities, and even intellectual property are poised to follow.
To tokenize trillions in assets, the industry needs more than Ethereum’s blockspace. It needs audit-grade infrastructure for RWA tokenization, infrastructure that can prove assets are real, compliant, and interoperable across ecosystems.
The Infrastructural Gap in Ethereum’s RWA Ecosystem Despite Ethereum’s dominance, the current infrastructure faces limitations:
Data Integrity: Smart contracts cannot independently verify whether off-chain data (bond prices, real estate deeds) are legitimate.
Data Availability: On-chain storage is expensive and impractical for large datasets.
Interoperability: RWAs must interact across blockchains, but existing solutions lack standardized proofs.
Scalability: Existing Data Availability (DA) layers rely on old architectures that fail to deliver succinct, verifiable proofs.
These bottlenecks are why many tokenization projects remain in pilot phases. Without verifiable infrastructure, RWAs risk being reduced to trusted representations, replicating the same problems of traditional finance.
Orochi Network - Building Audit-Grade Infrastructure for RWA Tokenization Orochi Network is the world’s first Verifiable Data Infrastructure. It provides the missing layer between real-world assets and decentralized finance by transforming raw data into verifiable data.
Key Innovations: Verifiable Data Pipeline: Every step of data processing, sampling, transformation, storage, is cryptographically proven. No third-party trust required.
Native ZK-Data rollups: Unlike DA layers that just store data, Orochi compresses entire datasets into
succinct Zero-Knowledge Proofs (ZKPs). This enables compliance checks and asset verification on-chain at minimal cost.
By solving these bottlenecks, Orochi becomes the audit-grade backbone for RWAs, stablecoins, and next-generation DeFi.
zkDatabase: The Engine of Verifiable RWA Tokenization At the core of Orochi Network lies zkDatabase, a specialized platform that merges modern noSQL database architecture with advanced cryptographic modules.
What Makes zkDatabase Unique? Zero-Knowledge-Proof: Queries and transactions are provably correct without exposing underlying data.
Enterprise-Grade Scalability: Built on modular architecture, with planned support for next-gen proof systems like Plonky3.
Privacy by Default: Using zkSNARKs and homomorphic encryption, zkDatabase allows institutions to prove compliance (KYC/AML, asset backing) without revealing raw records.
Flexible Deployment: Operates fully off-chain for simplicity or via on-chain rollups (Mina, Ethereum L2s) for audit-grade compliance.
Use Cases for zkDatabase in RWA & Stablecoins Tokenized Treasurys & Funds: Asset managers can prove reserves cryptographically.
Stablecoins: Issuers can demonstrate 1:1 backing without exposing banking records.
Real Estate: Land registries can tokenize deeds while preserving private details.
Supply Chains: zkDatabase can verify product authenticity without leaking trade secrets.
In essence, zkDatabase is the infrastructure support for RWA and stablecoin ecosystems, the missing engine for institutional adoption.
Helix – Pioneering tokenized financial products with verifiable compliance.
Plume Network – Building RWA-native infrastructure for cross-border tokenization.
Lumia – Innovating on-chain real estate and asset-backed securities with privacy-first proofs.
Welf Finance – Integrating zkDatabase for privacy-preserving wealth management compliance.
XDC Network – Bridging trade finance and tokenized commodities with verifiable data.
These partnerships showcase how zkDatabase is not theoretical, it’s actively powering and connecting with RWA pioneers, positioning Orochi Network as the trusted backbone for the tokenized economy. Read more: How Orochi Network’s zkDatabase Empowers HELIX to Scale Real-World Asset Finance?
Competitive Landscape: Why Orochi Leads Projects like Celestia, Avail, and EigenDA provide data availability, but they lack native ZKP integration. They can store data, but they cannot prove it.
Orochi Network’s edge:
Proof-of-Everything: From data sampling to transformation, every step carries a cryptographic proof.
Directed Acyclic Graph (DAG) Structure: Enhances scalability and performance beyond linear blockchain designs.
Recognition: Supported by the Ethereum Foundation and leading VCs.
This positions Orochi not just as another zkDA Layer, but as the audit-grade infrastructure for the next financial era.
Future Outlook The Ethereum ecosystem will continue to dominate liquidity for stablecoins and RWAs. But as adoption accelerates, infrastructure like zkDatabase becomes non-negotiable:
Compliance-first institutions will require provable audit trails.
Cross-border finance will demand blockchain interoperability.
DeFi protocols will compete on verifiable transparency, not just yield.
With zkDatabase, Orochi Network ensures that Ethereum’s stablecoin surge evolves into a sustainable RWA revolution.
Conclusion The surge of Ethereum’s stablecoins shows us the appetite for digital money and tokenized assets. But to scale from billions to trillions, the industry needs more than hype, it needs proof.
Orochi Network, powered by zkDatabase, provides that proof. By combining Zero-Knowledge Proofs, verifiable data pipelines, and blockchain-agnostic design, Orochi delivers the infrastructure for RWA tokenization, audit-grade, privacy-first, and scalable.
Developers and institutions exploring RWA and stablecoins - start building with zkDatabase. The future of tokenization runs on verifiable data. FAQs 1) What problem does Orochi’s zkDatabase solve for RWAs and stablecoins? Ethereum secures transactions but can’t verify off-chain data or provide audit-grade proofs. zkDatabase turns raw data into cryptographically provable, privacy-preserving records so issuers can prove reserves, compliance, and asset authenticity without exposing sensitive details.
2) How is Orochi different from DA solutions like Celestia, Avail, or EigenDA? Those focus on storing data; Orochi adds native Zero‑Knowledge proofs. Its Verifiable Data Pipeline, proof‑system agnostic design, DAG architecture, and Proof‑of‑Everything approach produce succinct, on-chain verifications rather than mere availability.
3) Who is using zkDatabase today and for what? Partners like Helix, Plume Network, Lumia, Welf Finance, and XDC Network use zkDatabase for tokenized Treasurys, fund reserve proofs, privacy‑first real estate tokenization, and compliant wealth management—demonstrating interoperable, audit‑grade RWA infrastructure across chains.
Arthur Hayes has said he has closed Maelstrom’s directional trading book, citing macroeconomic and geopolitical risks, as Lookonchain has reported $22.28 million in sales across Ethereum and six other tokens.
Summary
Arthur Hayes says he closed Maelstrom’s directional book amid macroeconomic and geopolitical uncertainty. Lookonchain reported $22.28 million in sales across ETH, ENA, UNI, ETHFI, AERO, PENDLE and ZAMA. Ethereum accounted for approximately 68% of the reported sales, totaling 6,400 ETH worth $15.2 million. Hayes plans to remain on the sidelines, reversing Maelstrom’s previously declared maximum-risk positioning. Lookonchain identified 6,400 ETH as the largest component of the transactions in an Oct. 24 post, valuing the Ethereum at $15.2 million. A subsequent post from the blockchain tracker shared Hayes’s statement that he had taken profits on ETH, ENA, UNI, and other tokens.
Arthur Hayes says macro risks drove his exit In his statement on X, the BitMEX co-founder described the positions as Maelstrom’s directional book and said he intended to wait before returning to the market.
“I think we gotta go down to go up.”
Hayes attributed his caution to conditions in “macro and geopolitical land,” without identifying a particular policy decision, conflict or economic release. He gave no price target for Bitcoin or Ethereum and did not set a date for rebuilding the positions.
His reference to the directional book limits the scope of the announcement. The statement did not provide a complete inventory of Maelstrom’s investments, remaining holdings, hedges, or private-market commitments. It did not separately identify a Bitcoin sale.
Although Hayes described the disposals as profit-taking, he did not publish acquisition prices or realized returns. Lookonchain’s dollar figures describe the reported value of the tokens involved, not the amount of profit earned.
Ethereum accounts for roughly 68% of the reported sales Beyond ETH, Lookonchain listed 14 million ENA worth $2.76 million and 323,000 UNI valued at $2.24 million. The tracker included 1.89 million ETHFI worth $1.23 million.
The smaller positions comprised 546,609 AERO valued at $398,000, 120,000 PENDLE worth $244,000 and 3 million ZAMA worth $214,000, according to its breakdown.
Adding the seven rounded valuations produces $22.286 million, close to the tracker’s $22.28 million headline figure. On that basis, Ethereum represented approximately 68.2% of the listed value, while the other six tokens accounted for $7.086 million.
ETH, ENA and UNI together represented $20.2 million, or roughly 90.6% of the listed total. The calculation uses Lookonchain’s rounded dollar amounts and does not establish exact execution proceeds or trading fees.
The posts did not provide a complete transaction-by-transaction account of execution venues or counterparties. Hayes’s statement supports his account of selling, but it does not independently reconcile every quantity in the tracker’s list with a completed trade.
Maelstrom previously declared maximum risk exposure The exit follows an earlier period when Hayes publicly backed aggressive exposure to crypto. As crypto.news previously reported on Aug. 25, he had described Maelstrom as being at maximum risk exposure, naming Bitcoin, Ether, Ethena and Ether.fi among its main positions.
The underlying essay, “Same Same But Different,” carries an Aug. 24 date on his Substack. Hayes argued that U.S. Treasury efforts to support the government bond market would create conditions favorable to Bitcoin and other crypto assets.
His argument centered on Treasury Secretary Scott Bessent’s approach to bond buybacks and dollar liquidity. Hayes expected volatility even if his bullish forecast proved correct, warning readers that an upward market could contain severe corrections.
The August coverage distinguished his interpretation from the Treasury’s stated purpose for buybacks, which was supporting market liquidity and managing cash. The operations were not equivalent to Federal Reserve quantitative easing.
Neither the August essay nor the Oct. 24 statement supplied audited portfolio records. The earlier declaration and latest exit describe Hayes’s stated positioning at different times; they do not establish the full sequence of Maelstrom’s trades between those dates.
Earlier Ethereum trades involved both buying and selling Hayes-linked wallet activity has previously included purchases followed by reported disposals within days. On June 15, Lookonchain identified a wallet possibly linked to him that received 3,000 ETH worth $5.42 million from market maker Flowdesk.
The wallet attribution was qualified in the original report. A transfer from a market maker did not, by itself, provide a full record of the recipient’s other holdings or financing arrangements.
In the same June coverage, Hayes’s June 8 essay “Reality Test” was cited as disclosing sales of Hyperliquid, Near Protocol, Worldcoin and Zcash. He characterized those decisions as a defensive response to macro risks while retaining Bitcoin and Ethereum as core holdings at that time.
During the June 15 session, the same coverage identified another wallet, geministar.eth, as accumulating 21,136 ETH worth around $37 million from Binance. Ethereum had risen almost 6% over the preceding 24 hours and traded near $1,828 at the time of that report. Those prices and wallet movements refer to June and are not current market readings.
By June 19, Lookonchain had reported that he sold 6,000 ETH for approximately $10.14 million, at an average price of $1,690. The tracker estimated a loss of $606,000 after reporting purchases of roughly 5,900 ETH at an average price of $1,793 in the preceding days.
The June 19 tracking included buying by other investors. K3 Capital withdrew 10,000 ETH worth $16.9 million from Binance, while a wallet linked to entrepreneur Chun Wang acquired 7,650 ETH valued at nearly $12.9 million.
Initia, a Layer 1 blockchain and interwoven modular roll-up network, suffered a major security incident on 23rd October. An attacker allegedly exploited a vulnerability in its blockchain to create tokens without permission and withdraw real assets from cross-chain bridges.
According to the investigation, the attack began at 14:59:26 UTC when the exploiter used a single signed transaction to mint 2 million AUSD tokens out of thin air on Initia.
The transaction reportedly consumed 135,888 gas and called a ‘Move’ function directly, without requiring a cross-chain bridge message. So, instead of breaking the bridge’s security verification process directly, the attacker hacked a vulnerability in the token-minting mechanism.
All about Initia’s security incident The attacker didn’t stop there though. Instead, they exploited cross-chain infrastructure to convert these unauthorized tokens into real assets on Ethereum [ETH]. So, roughly 153 seconds after the initial mint, a valid LayerZero message enabled the release of 1.4 million AUSD from the Ethereum-side adapter.
At the same time, the attacker also withdrew 105 ETH from the native-ETH adapter and obtained 1.08 million USDC through Circle’s Cross-Chain Transfer Protocol (CCTP). According to researchers, the attacker converted the funds into Ethereum through decentralized trading services, including 1inch and 0x.
Here, within approximately 7 minutes of the initial mint, around $2.65 million had reached Ethereum. The consolidated funds later amounted to 1,135.52 ETH, worth approximately $2.73 million, held in a newly created wallet.
This seemed to be very similar to September’s Liquid Network incident, where a software bug enabled the creation of unauthorized L-BTC and the withdrawal of real Bitcoin.
As expected, the incident forced Initia to halt its L1 blockchain and roll-ups. And yet, despite this rollercoaster, Initia’s token INIT was trading at $0.1484 at press time after a hike of 11.7% in the last 24 hours.
2026 has so far being a tricky year for security incidents like these. In fact, AMBCrypto’s recent report found that crypto security losses surged by 55% to $1.18 billion in Q3 2026, while reported incidents jumped from 67 to 107.
Final Summary Transaction reportedly consumed 135,888 gas and called a ‘Move’ function directly, without requiring a cross-chain bridge message. This was very similar to September’s Liquid Network incident, where a software bug enabled the creation of unauthorized L-BTC and the withdrawal of real Bitcoin.
Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom Fund, has exited his entire directional trading book.
On October 24, 2026, he confirmed the move on X, selling Ethereum (ETH), Ethena (ENA), Uniswap (UNI), and other altcoins worth roughly $22.28 million.
The exit signals a sharp defensive pivot amid rising macro and geopolitical uncertainty.
Hayes Closes the Book: What He Sold and Why In his own words on X, Arthur Hayes wrote: “I dumped it all. The Maelstrom directional book, took profits on $ETH, $ENA, $UNI and other shitcoins. I think we gotta go down to go up. It looks a bit dicey out there in macro and geopolitical land. Going to sit on the sidelines and wait for the all clear signal … Brrrrr.”
On-chain data from Lookonchain confirmed the scale of the exit. The sales included 6,400 ETH worth approximately $15.2 million.
Hayes also offloaded 14 million ENA (~$2.76M) and 323,000 UNI (~$2.24M). Smaller positions in ETHFI, AERO, PENDLE, and ZAMA were also closed.
The timing is striking. Just weeks ago, Hayes predicted Ethereum could reach $10K alongside massive ENA and ETHFI gains. That bullish stance is now paused. Hayes is not abandoning his long-term thesis, he is managing short-term risk.
The broader market context supports his caution. Multiple factors have been dragging crypto prices lower this week, including hawkish Fed signals, ETF outflows, and risk-off sentiment across tech and AI names. Geopolitical tensions have added another layer of uncertainty.
A Tactical Retreat, Not a Change of Heart This is not the first time Arthur Hayes has stepped back from altcoin exposure during uncertain periods.
He previously flagged crypto’s ‘no-trade zone’ and outlined his Bitcoin, Gold, and Hyperliquid outlook. That cautious streak is now showing up in his portfolio.
Earlier this year, a wallet linked to Hayes bought $5.4M in ETH following the US-Iran deal. That aggressive accumulation has now been reversed.
The pattern is consistent: Hayes cycles between deep alt exposure and full cash when macro conditions deteriorate.
His long-term structural view remains intact. Hayes has doubled down on Bitcoin reaching $1 million and laid out a potential timeline.
The current cash position is a tactical pause, not a permanent exit from crypto markets. For ENA specifically, Standard Chartered has separately forecast ENA reaching $2 by 2028.
The longer-term narrative around Ethena remains, even as Hayes steps aside in the near term. It is also worth noting that Hayes sold his entire Hyperliquid position earlier this year, sending HYPE down 4%.
That precedent shows that his sell announcements carry real market weight. ETH, ENA, and UNI could face near-term selling pressure as the market digests this exit.
Arthur Hayes said he is waiting for the ‘all clear signal’ before re-entering. Until then, Maelstrom sits in cash, and the market will be watching closely for his next move.
In this week’s edition of the weekly recap, US regulators finalized stablecoin rules under the GENIUS Act, Bitcoin lost ground after a sharp reversal in ETF flows, and Solana activated Alpenglow. Corporate Bitcoin financing, institutional custody deals, and Ethereum’s postponed testnet upgrade also shaped crypto.news coverage for Oct. 18–24.
Summary
Jan. 18, 2027, is the effective date for the OCC’s final GENIUS Act stablecoin rules.
$635.49 million left US spot Bitcoin ETFs on Oct. 22, ending three consecutive inflow sessions.
Solana activated Alpenglow on Oct. 21, targeting roughly 150-millisecond finality with its new consensus system.
Strategy increased its Bitcoin holdings to 848,517 BTC and expanded its securities buyback authorization.
Strive closed a $630 million preferred stock offering carrying a fixed 15% annual dividend rate.
GENIUS Act rules set January start date
The Office of the Comptroller of the Currency finalized stablecoin regulations on Oct. 21, establishing standards for reserve assets, redemptions, risk management, custody and issuer supervision. The rules take effect Jan. 18, 2027, and cover issuers and related activities under the agency’s jurisdiction.
Existing issuers with substantially complete applications pending by the deadline may seek temporary compliance waivers while their submissions undergo review. Anti-money laundering and sanctions provisions remain subject to a separate rulemaking with the Treasury Department. The framework also addresses foreign issuers and transitions from state to federal oversight.
Bitcoin ETF withdrawals interrupt the recovery
US spot Bitcoin ETFs recorded $635.49 million in net outflows on Oct. 22, reversing three consecutive sessions that brought in approximately $1.08 billion. SoSoValue’s figures showed the largest daily withdrawal since June 25, with October’s cumulative flows turning negative by about $174.5 million.
Bitcoin traded near $81,450 in crypto.news’ Oct. 23 market report after failing to sustain its recovery toward $85,000. The retreat returned attention to the $80,000 area. CoinGlass separately recorded roughly $406 million in liquidations across the broader cryptocurrency market over 24 hours, rather than Bitcoin alone.
Solana activates Alpenglow consensus
Solana Foundation’s activation record confirmed Alpenglow’s deployment on mainnet during epoch 1064 on Oct. 21. The Votor consensus system targets roughly 150-millisecond finality, compared with 12.8 seconds under TowerBFT. Transaction execution, program behavior, and fee mechanics remain unchanged.
Alpenglow consensus began at slot 459,653,000 after a genesis block received certification from 446 of 654 validators. Rotor, the proposed data-distribution component, remains reserved for a later release. Solana also promoted Quantumglow research, but the proposed post-quantum adaptation has no announced deployment date and is separate from the completed consensus migration.
Strategy adds Bitcoin and expands buybacks
Strategy acquired another 267 Bitcoin, bringing its holdings to 848,517 BTC as of Oct. 18. Michael Saylor’s Oct. 19 disclosure also reported $193 million in STRC preferred stock repurchases and approximately $5.3 billion in dollar assets. The company increased its digital credit securities repurchase authorization from $2 billion to $3 billion.
Strive closes $630 million preferred offering
Strive closed its upsized offering on Oct. 20, selling 7 million SATS preferred shares for $90 each. The shares carry a fixed annual dividend of 15% against their $100 stated value. The Bitcoin treasury company outlined an 18-month dividend reserve equivalent to $157.5 million at the final offering size; payments remain subject to board approval and legally available funds.
BlackRock proposes Bitcoin protection ETF
BlackRock filed for a fund called the iShares Bitcoin Managed Protection ETF, with proposed ticker PBIT. Its options strategy would seek partial downside protection while limiting potential gains. The proposed fund would hold cash, fixed-income instruments, and Bitcoin-linked options rather than Bitcoin directly. Its filing did not establish a confirmed launch date or guarantee investors a maximum loss.
JPMorgan expands tokenized funds to Solana
J.P. Morgan Asset Management brought two funds to Solana through Morgan Money, offering MONY and JLTXX to qualified US investors. Investors can subscribe and redeem through the platform and receive token balances at their blockchain addresses. Existing fund documents describe onboarding controls, approved-wallet requirements and $1 million opening minimums, with waivers available under JLTXX’s terms.
Standard Chartered signs Zodia acquisition agreement
Standard Chartered signed definitive agreements to acquire full ownership of Zodia Custody and integrate its regulated custody operations into Securities Services. The Oct. 21 announcement left completion subject to regulatory approvals and customary conditions. Financial terms were undisclosed. Zodia’s software and professional services operations will operate separately as Zodia Solutions under SC Ventures.
Fireblocks denies reported Visa acquisition talks
Fireblocks denied acquisition reports after Axios reported that Visa was negotiating a purchase worth approximately $2.5 billion. A spokesperson said the reported transaction was news to the company and untrue at the time. Visa declined to comment on the reported negotiations. Neither company announced a definitive agreement, leaving the proposed deal disputed.
Tether joins Tenstorrent’s $1.5 billion raise
Tether joined Tenstorrent’s financing at a $6.2 billion post-money valuation, extending its investments in AI infrastructure. Tether announced its participation on Oct. 20 after the chipmaker disclosed the completed Series E. Tenstorrent plans to fund server deployment, chip development and commercial expansion. The $1.5 billion represents the whole round; Tether’s individual contribution was undisclosed.
Ethereum postpones Glamsterdam testnet activation
Ethereum developers postponed the Hoodi upgrade scheduled for Oct. 26 while investigating EIP-8037’s interaction with existing smart contracts. ChainSecurity identified risks involving failed calls and retry mechanisms under proposed gas changes. The decision also removed a planned increase to a 200 million gas limit. Developers had not announced replacement Hoodi or mainnet activation dates.
Phantom opens Kalshi markets to US users
Phantom opened Kalshi market access for eligible US wallet users, with combined platform and exchange fees of $0.02 per contract. Customers must create or link a Kalshi account and complete identity checks. Trading funds move to Kalshi, while available proceeds return to Phantom’s Cash account. The integration uses conditional CFTC staff no-action relief for specified software activities.
Initia halts its blockchain after security incident
Initia halted its layer-1 network and rollups on Oct. 23 while investigating a security incident with researchers, validators, and exchanges. Security researcher Spreek alleged unauthorized token minting and estimated that an attacker had cashed out approximately $2.6 million. Initia confirmed the suspension but did not establish a final loss figure in its initial statement.
OKXICE encounters issuer objections to stock tokens
OKXICE’s proposed stock-token venue faced nine documented objections, including Broadcom, CoreWeave, Verizon and UnitedHealth, according to its Oct. 15 notice covered on Oct. 18. The SEC’s exemption lets issuers block unaffiliated tokenization on the notifying venue. The proposed platform would use Uniswap v4 pools on XLayer, with no confirmed public launch date.
Midnight, a privacy-focused blockchain platform, has revealed its strategic six-month roadmap featuring innovative DeFi solutions aimed at leveraging established liquidity on Ethereum and other EVM-compatible networks. Rather than building its own isolated trading pools, Midnight intends to enable users to trade against liquidity already present on leading blockchains.
Key features of the six-month roadmapCrypto commentator Linda presented the project’s development plans in a recent video, highlighting the integration of cross-chain access as an early priority. She pointed out that connecting to major networks, like Ethereum, offers substantial benefits by tapping into deep existing liquidity and reducing the challenges faced by emerging chains, where low volumes can make trading costly or unattractive.
The project roadmap lists four main features: NIGHT token staking, private lending, tokenized financial assets, and cross-chain trading. However, several of these elements remain in the planning stages. The team has scheduled NIGHT staking for the first quarter of 2027, and information on reward rates or specific economic parameters has not yet been released.
Midnight also intends to launch native token swaps and introduce “night mode,” a functionality designed to provide liquidity access across connected blockchains. The initial launch will focus on Ethereum and other major EVM-compatible chains, with plans to add more networks in early 2027.
According to Linda, this approach could improve Midnight’s competitiveness as “thin liquidity” is a common challenge for newer blockchains. By enabling access to established DeFi markets, the platform aims to make trading more efficient, although no execution cost figures or transaction performance details are currently available.
Linda described Midnight as the “VPN for DeFi,” emphasizing that private order types are designed to prevent trading bots from accessing order flow information before execution, which could otherwise allow bots to exploit upcoming trades.
The team is also developing a feature to facilitate sending trade offers via messaging platforms such as Telegram, Discord, or email. Once the offer is accepted, both parties would automatically settle the transaction on-chain. Cross-chain compatibility for these peer-to-peer trades is scheduled for rollout in the following year.
Collateral Warehouse and institutional adoption plansThe roadmap includes the introduction of a “Collateral Warehouse,” a mechanism that lets users deposit collateral once and utilize it across all connected blockchains without moving the assets between networks via bridges. Full technical details regarding collateral management and risk mitigation have not been disclosed at this stage.
A private lending market is also planned, allowing users to either lend assets or borrow against their crypto holdings while keeping the details of their positions confidential. As per the development schedule, Cardano stake pool operators will participate in block production for Midnight at the same time NIGHT staking is introduced in Q1 2027.
For institutional participants, the roadmap features privacy-oriented tokens supporting confidential balances and transfers, ongoing work on tokenized bank deposits, and an expansion into investment funds, credit markets, and tokenized property in early 2027.
While the outlined features could drive early adoption, many specifics remain open. Investors will be monitoring upcoming disclosures on staking yields, market demand, and risk frameworks as these applications move closer to launch.
Midnight’s effort to prioritize cross-chain liquidity and private DeFi infrastructure comes as the broader decentralized finance sector seeks scalability and privacy enhancements.
Mini dictionary: EVM-compatible networks refer to blockchains that can run Ethereum smart contracts using the Ethereum Virtual Machine (EVM), enabling interoperability and ease of deployment for decentralized applications.
David Hoffman, once one of Ethereum's biggest advocates, drew attention to the rise in two altcoins.
Bankless co-founder David Hoffman, in a post today, highlighted the surge in PRL and QTC. Hoffman cited these projects as examples of what he called “2017 Bitcoin clones,” reflecting a new wave of interest.
In his post, he stated that PRL had risen by 30% weekly and its fully diluted valuation had reached $4.2 billion. For QTC, he highlighted a 300% monthly increase and a valuation of approximately $1.8 billion based on a supply of 21 million.
Hoffman’s emphasis was on tokens using the 21 million limited supply narrative reaching billions of dollars in valuations again. The statement did not include a technical assessment of whether these projects possess the same security or use cases as Bitcoin.
When reading the figures, the distinction between valuations is also important. Specifically, fully diluted valuation shows the equivalent of the entire supply calculated at the current price; it doesn’t necessarily have to be the same as the market value of the tokens in circulation.
Hoffman did not provide a new price target in his post. He also used weekly performance for PRL and monthly performance for QTC; meaning that not all of the reported increases are from today.
*This is not investment advice.
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Initia halts blockchain after exploit reportedly drains over $2.6MLatest NewsPublishedOct 23, 2026
The blockchain suspended its layer-1 network and rollups after security researchers identified unauthorized token minting and millions in assets transferred to Ethereum.
Initia halted its layer-1 blockchain and rollups after blockchain sleuths reported an exploit that allowed an attacker to mint tokens without authorization and drain more than $2.6 million in crypto assets.
The network was halted at 3:41 p.m. UTC on Friday following a security incident, Initia said in a post on X. The team said it was working with security researchers, validators and exchanges to determine the full extent of the impact.
Blockchain security researcher Spreek first flagged the exploit on Friday, reporting that an attacker had minted tokens without authorization and converted approximately $2.6 million into other assets, with additional funds still being moved.
DeFi platform D2 Finance later reported that the attacker exploited a vulnerability to mint 2 million AUSD tokens without sufficient backing. The attacker then used cross-chain transfers to withdraw approximately 1.4 million AUSD, 105 Ether (ETH) and 1.08 million USDC (USDC) to Ethereum.
The stolen assets were subsequently consolidated into an Ethereum wallet holding approximately 1,135.5 ETH, worth $2.73 million, according to D2 Finance. The firm attributed the exploit to a vulnerability in a Move function that allowed the attacker to create unbacked tokens and exchange them for assets on Ethereum.
Source: Initia
Initia is a layer-1 blockchain designed to support a network of interconnected rollups, known as Minitias. Its native token, INIT, briefly fell to around $0.115 on Friday before rebounding above $0.15, according to CoinGecko data. The token was trading near $0.1496 at the time of writing, an increase of about 14% over the previous 24 hours.
Initia has not publicly confirmed the estimated losses or the precise cause of the exploit, and the extent of the impact on users and the timeline for restoring network operations remain unclear. Cointelegraph was unable to contact Initia for additional comment through its official X account.
Magazine: New DeepSeek ban in US, Swiss-Asia crypto ties deepen: Asia Express
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Spot ether ETFs have lost $1.2 billion in October and Bitmine is weeks from its 5% cap, leaving ETF flows to decide who absorbs ether’s new supply into year-end.
Ether's spot ETF buyers and its largest corporate holder are both pulling back in October.
Posted October 23, 2026 at 3:00 pm ET.
Ether’s (ETH) demand this year has largely come from two places: spot exchange-traded funds (ETFs) and Bitmine Immersion Technologies (BMNR), the company building an ether treasury. In October, both are pulling back at once.
No month this year has seen spot ether ETFs lose as much as October, with $1.2 billion in net outflows so far. Investors pulled money on all but two trading days through Oct. 22.
Bitmine, meanwhile, is about 66,000 ETH short of its goal of owning 5% of all ether, by our count from its latest holdings update. At the company’s current pace, it hits its target late next month.
Ether bulls often parse their outlooks through adoption headlines, like JPMorgan bringing its deposit token to Ethereum this week. Adoption builds the network, but it only lifts the price when someone buys the coin. Presently, the question is who absorbs the roughly 20,000 new ETH the network issues every week once Bitmine stops.
This issue of Bits + Bips measures how much of that supply Bitmine has been taking, why no other ether treasury can take over, and what ETF flows would need to look like for ether to hold up into year-end.
Spot ether ETFs swung from $2.7 billion of net inflows in August and September to $1.2 billion of net outflows in October through Oct. 22. Source: SoSoValue; Farside. Bitmine’s Buying Has Already Slowed Bitmine is finishing its accumulation at a fraction of the pace it started with. The company has bought ether every week since June 30, 2025. In April and May it bought more than 100,000 ETH in a single week four times. In each of the last two weeks it bought about 12,500.
It now holds 6.04 million ETH, or 4.9% of Ethereum‘s circulating token supply, and its cash has fallen by about $30 million a week with no new capital raise in its last three updates.
“We’re done stacking,” Bitmine Chair Tom Lee said earlier this month in a message to investors.
Bitmine’s 5% ether target is “a hard cap,” Lee said at the Token2049 conference, adding, “We’re not gonna be accumulating past 5%.”
One caveat on timing: 5% of ether’s supply is a moving target. Supply grows by about 87,000 ETH a month, so the finish line moves out by roughly 4,300 ETH a month, by our count.
Additionally, Ethereum’s issuance is subject to change, and not fixed at roughly 20,000 new ETH per week. The network uses a fee-burning mechanism that dynamically adjusts to user demand. At times of high use, like in 2023, this mechanism burns more tokens than are created to pay the validators that secure the network, actually turning Ethereum’s token economy deflationary. That said, ether token inflation has stayed relatively stable this year, in part due to a migration of user activity onto Layer-2 networks, which has left mainnet gas fees too low to burn off the newly issued coins.
ETF Money Moves in Billions The ETFs have been the larger and less predictable buyer this year. Net inflows reached $1.85 billion in August and another $832 million in September, then reversed in October.
The funds now hold roughly 6.2 million ETH, about the same as Bitmine, from their combined net assets of $14.6 billion. However, the two buyers move at very different speeds. October’s outflows have averaged about $357 million a week. Bitmine’s recent purchases come to about $30 million a week at its own reported prices. The ETF swing is about 12 times larger.
In the rest of the issue, subscribers get:
How much of ether’s new supply Bitmine has been absorbing, and why part of the hand-off has already happened Why no other ether treasury can step in, judged by what their shares trade at against their coins What is driving October’s ETF outflows The weekly ETF number that would cover ether’s new supply after Bitmine stops, plus bull, base and bear ranges for ETH into year-end Already a subscriber? Keep reading.
Why serious investors subscribe:
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The price of Ethereum remained under pressure around $2,410 on October 23, following net outflows from US spot Ether funds totaling $110.6 million. The main outflows occurred from large funds operated by BlackRock, while a long-term investor sold 3,000 ETH, and the planned Glamsterdam testnet upgrade faced postponement due to potential smart contract compatibility concerns.
Ethereum price struggles and ETF outflowsEthereum traded around $2,410 as daily trading volume approached $11.65 billion. After reaching higher values earlier in October, ETH continued to remain below the $2,500 threshold and also fell beneath its monthly opening of $2,685.
During October, efforts to reclaim $2,500 were met with selling pressure, reflecting a broader downturn in the market. On October 22, US spot-based Ethereum exchange-traded funds recorded net outflows of $110.6 million.
BlackRock, a global investment management corporation, led the withdrawals with its ETHA fund losing $75.5 million and its ETHB product facing $17.2 million in outflows. Fidelity’s FETH fund, in contrast, attracted $2.4 million in inflows, but this modest reversal was not enough to offset the broader negative flows observed across the sector.
ETF/FundNet OutflowNet InflowBlackRock ETHA$75.5 million–BlackRock ETHB$17.2 million–Fidelity FETH–$2.4 millionSector Total$110.6 million–In the days preceding October 22, spot Ethereum funds had also faced a series of turbulent sessions, with roughly $320 million in net outflows between October 12 and October 16. This data reflects fund flows available on exchanges and does not include all institutional trades or individual off-exchange holdings.
Long-term investor exit draws attentionLookonchain, a blockchain monitoring service, reported that an early Ethereum investor sold 3,000 ETH for $7.23 million on October 23. The investor originally acquired the tokens nine years earlier at an average purchase price of $18.83 per ETH.
The investor’s exit generated a 128-fold return compared to their acquisition cost, highlighting the substantial long-term gains still possible in the cryptocurrency market even after significant volatility in recent months.
Lookonchain noted that while the sale brought considerable community interest, the movement of funds to exchanges does not always signal an immediate sale, as it could also precede further trading or repositioning strategies.
Mini dictionary: Lookonchain is a blockchain analytics platform that monitors and reports large crypto transactions and fund movements, offering real-time insights for market participants.
Glamsterdam testnet upgrade delayedThe Ethereum Foundation announced a delay in the planned activation of the Hoodi testnet by the Glamsterdam team, initially scheduled for October 26. The delay follows concerns about how Ethereum Improvement Proposal (EIP)-8037 may interact with existing smart contracts migrating from the Ethereum mainnet, and the decision to halt a proposed increase in the Hoodi gas limit to 200 million units.
These changes only affect the Hoodi testnet. Regular Ethereum users and mainnet holders do not need to take any immediate action, but the Ethereum Foundation recommended that validators and node operators consult updated client instructions.
The updated testnet timeline remains open, with the previous schedule no longer valid.
Key trading levels and analyst outlookEthereum’s 14-day Relative Strength Index (RSI) hovered near 41, suggesting a market posture below the neutral 50 mark but above the oversold threshold of 30. Immediate support was identified at $2,348, with stronger resistance at $2,414 and $2,461. Further support could be found around $2,286, while higher resistance levels may come into play at $2,524.
CryptoBusy, a market analyst, assessed that Ethereum is currently testing a daily support range between $2,350 and $2,480, after correcting from $2,700. A rebound above $2,500 is required before a possible run toward $2,800 can be considered.
CryptoBusy added that if the price falls below $2,350, the recovery prospects for ETH would likely weaken. The analyst marked $2,200 as a potential lower boundary, clarifying it is a reference level, not a formal target.
Presently, short-term price action in Ethereum is being shaped by fund flows, major investor moves, and the timing of technical upgrades, as traders react to shifting demand and emerging technical levels.
JPMorgan’s JPM Coin has recorded zero supply and zero transfers on Ethereum in a contract review by Sentora, days after the bank announced the deposit token’s arrival on the network.
Summary
Sentora reported zero JPM Coin supply and transfers on Ethereum, with one allowlisted address.
JPM Coin’s Base supply remained near $1 million across two addresses, according to Sentora.
JLTXX recorded $400 million in Ethereum redemptions as its Solana deployment reached $450 million.
Sentora found no live on-chain integration connecting JPM Coin with JPMorgan’s funds or DeFi protocols.
Sentora said its review found exactly one allowlisted address in the verified Ethereum contract, while the token’s Base deployment held roughly $1 million across two addresses, unchanged since November 2025.
The research firm’s findings cover the deposit token and separate movements in J.P. Morgan Asset Management’s tokenized liquidity fund. Its briefing reported $400 million in JLTXX redemptions on Ethereum across Oct. 21–22, alongside a rise in the fund’s Solana deployment from near zero to $450 million.
Sentora attributed those figures to its contract-level analysis. The timing does not establish that the same investors redeemed on Ethereum and subscribed on Solana, and the briefing did not identify transactions connecting the two movements.
JPM Coin’s Ethereum contract shows no supply in Sentora’s review
JPMorgan brought JPM Coin, which carries the ticker JPMD, to Ethereum for approved institutional clients on Oct. 19. As crypto.news previously reported, the bank’s Ethereum deposit token launch followed its November 2025 rollout on Base.
The deposit token represents U.S. dollar deposits held at JPMorgan. The launch coverage described institutional payments, securities settlement, and collateral payments as intended uses, with access restricted to approved customers despite the use of a public blockchain.
Sentora’s subsequent review reported no issued supply or transfers in the Ethereum contract it examined. Its Base findings described an unchanged supply balance, with holdings concentrated in two addresses.
An unchanged supply figure does not, by itself, establish whether transfers occurred during that period. Sentora’s briefing expressly reported zero transfers for Ethereum but did not provide an equivalent historical transfer count for Base.
The firm further said it had found no live on-chain integration between JPM Coin and the bank’s money market funds or decentralized finance protocols. Its statement concerned the integrations visible in its review, without documenting every potential institutional arrangement.
JLTXX records $400 million in Ethereum redemptions
Sentora reported that JLTXX’s Ethereum deployment recorded $400 million in redemptions across Oct. 21–22. Over the same period, its briefing placed the Solana deployment at $450 million after starting near zero.
The figures describe different measures across two networks. One is a redemption total, while the other is the reported size of a deployment after its growth. They do not establish an exact dollar-for-dollar migration.
J.P. Morgan Asset Management announced on Oct. 22 that JLTXX and its My OnChain Net Yield Fund, known as MONY, were available to qualified U.S. investors on Solana. Investors can access the two tokenized funds through Morgan Money, which handles subscriptions and redemptions and delivers token balances to blockchain addresses.
“Our clients operate across more than one network, and their liquidity should too,” said Paul Przybylski, the asset manager’s global head of product, digital and tokenized assets.
The company’s announcement identifies JLTXX as a U.S. registered government money market fund designed to support stablecoin issuers under the GENIUS Act. MONY is a separate private placement fund launched in December 2025. The release does not disclose assets held on Solana for either product.
JPMorgan’s fund documents retain investor and ownership controls
JPMorgan’s MONY FAQ lists a $1 million initial investment minimum and fees of 16 basis points. The document describes a British Virgin Islands private placement vehicle, with access subject to anti-money laundering and know-your-customer checks.
The FAQ says MONY invests in U.S. Treasury securities and Treasury-backed repurchase agreements, seeking a stable net asset value of $1 per share. Although its guidelines follow those applicable to government money market funds, the private vehicle is not subject to Rule 2a-7.
JPMorgan identifies SS&C as MONY’s transfer agent and says the official shareholder records remain off-chain. Investors need their own blockchain addresses to hold tokens, while peer-to-peer transfers are restricted to clients.
The Oct. 22 launch announcement warns that investments in the funds are not bank accounts and are not insured by the Federal Deposit Insurance Corporation. JPMorgan says the funds seek to preserve a $1 share value but cannot guarantee it.
BNY completes tokenized Treasury financing with Citadel Securities
A separate institutional transaction involved BNY’s tokenized Treasury repo deal with Citadel Securities, announced on Oct. 13.
BNY said Citadel Securities purchased a two-year U.S. Treasury note through the bank on Tradeweb. A tokenized representation of the security settled within minutes on BNY’s private digital ledger before Citadel Securities pledged it as collateral in an overnight triparty repurchase agreement.
BNY supplied cash against the security and described the transaction as the first use of tokenized assets on a major triparty repo platform. Its announcement documented trade execution, settlement and financing within the same workflow.
The bank said it plans to introduce further digital cash and tokenized deposit services. BNY expects to expand operating hours for its traditional settlement platforms covering Fed-eligible securities and U.S. triparty transactions into European and Asian trading hours next year.
An early Ethereum investor has moved 3,000 ETH, valued at approximately $7.23 million, to crypto exchange Kraken. According to onchain data tracked by analytics platform Lookonchain, the transfer took place on Friday. The wallet in question acquired the ETH about nine years ago at an average price of $18.83 per token, booking an estimated 128-fold profit on the original purchase price.
Major profit for early Ethereum adopterOnchain monitoring revealed that the investor’s wallet, identified as 0xa4c2CA8d5A6f488604cA417C0aaCe8E2621F02D0 and tagged by crypto intelligence firm Arkham Intelligence, received the initial ETH funds from a Gemini hot wallet and an additional address between 2015 and 2016.
Lookonchain reported that the 3,000 ETH transfer to Kraken signals the possible liquidation of the holdings. While deposits to exchanges often precede sales, there is no public order data confirming that the entire stack was sold in a single transaction or at one price. Nonetheless, assuming a current ETH price near $2,410, the investor’s $56,500 original cost would have appreciated to over $7.2 million.
The 3,000 ETH transferred to Kraken can be traced back to purchases made nine years ago, representing a significant return on investment for the early adopter based on today’s ETH price.
Mini dictionary: Arkham Intelligence is a blockchain analytics company specializing in tracking and labeling crypto wallets to provide transparency and risk assessment for market participants.
Ethereum price steadies despite large holder’s exitDespite the sizable transfer, ETH’s market price held steady. CoinMarketCap data showed Ethereum trading at $2,405.81, up 1.27% in the last 24 hours. Analysts noted that recent gains have been supported by modest capital rotation into alternative cryptocurrencies, while Bitcoin’s market dominance eased during the same period.
No direct evidence suggests that the early investor’s transfer affected market prices. Ethereum continued to trade in a narrow range through the session, with the broader crypto market displaying similar stability. The current movement is seen as part of ongoing price consolidation, rather than a response to isolated large holder actions.
Ethereum demonstrates resilience as it remains within a consolidation range, even after a major early adopter moved 3,000 ETH to an exchange for potential sale.
Support and resistance levels draw trader focusMarket observers are closely watching key technical levels for Ethereum. According to analyst CryptoBusy, ETH is testing an ascending trendline with support between $2,350 and $2,480, following a recent decline from $2,700. If buyers maintain the $2,350 level, a recovery toward $2,500 is projected, with $2,800 identified as the next major resistance point.
On the downside, a decisive break below $2,350 could prompt further losses toward $2,200. CoinMarketCap notes a similar outlook, suggesting a support band at $2,350–$2,390. Across several analyst assessments, $2,350 has emerged as a critical line to monitor. These technical perspectives will likely shape near-term trading strategies.
Key LevelScenarioAction Point$2,350SupportBreak below signals possible drop to $2,200$2,480Support/ResistanceDefend for bounce toward $2,500/$2,800$2,800Major resistanceBreak above signals next upside targetMacro events may influence upcoming moves. CoinMarketCap identified the upcoming Federal Reserve policy meeting on October 27-28 as a relevant potential catalyst. Trader Daan Crypto Trades emphasized the importance of waiting for a clear resolution above or below this range before making directional bets, citing continued price congestion between $2,350 and $2,550.
While the early investor’s transfer drew attention, analysts suggest Ethereum’s immediate trajectory will depend on the defense or loss of key technical support, with broader macro triggers such as central bank policy potentially steering market direction in the coming days.
Bitcoin is holding above $81,000 despite heavy institutional ETF outflows and waning momentum in the tech sector.
Notable Statistics:
Coinglass data shows 98,065 traders were liquidated in the past 24 hours for $253.93 million. SoSoValue data shows net outflows of $635.5 million from spot Bitcoin ETFs on Thursday. Spot Ethereum ETFs saw net outflows of $110.5 million. In the past 24 hours, top gainers include Akedo, Pepe, and Dash. Notable Developments:
Bitcoin’s Rally Hits 3 Roadblocks: Can Bulls Shake Off ‘Black October’?Bitcoin Could Send to $100,000 if it Breaks $86,000, Top Analyst PredictsEvernorth CEO Shares Why He Chose XRP Over Bitcoin: ‘With BTC You Can’t Do Much On-Chain’Ripple Partners With Arf to Bring RLUSD Liquidity to XRP LedgerBitcoin Could Crash $10,000 if Equities Drop 20%, Bloomberg’s McGlone WarnsPresident Trump, World Liberty Financial Sued Over $2.5 Billion UAE Crypto Deals: ReportBitcoin to $1 Million? Don’t Expect 100X Returns Anymore, Dan Tapiero SaysTrader Notes:
Trader KillaXBT predicts Bitcoin could rally at least 5% as a major cycle pivot approaches in the coming days.
The trader noted that Bitcoin has moved against prevailing market sentiment in all 11 previous pivots over 600+ days, suggesting the current bearish outlook could trigger an upside reversal.
Cryptoinsightuk warned that Bitcoin could face another long squeeze as leverage builds despite prices remaining flat near recent lows.
“I think this weekend could be interesting,” he added pointing to geopolitical catalysts like Israeli elections.
Following Bitcoin’s decline from $84,000, open interest initially fell before rebounding 5.15% in BTC terms and 4.68% in dollar terms, signaling renewed leverage.
The trader expects a potential downside liquidity sweep, possibly triggered by broader market catalysts, and plans to buy altcoins such as Ethereum if prices fall further.
Image: Shutterstock
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Arthur Hayes expects HYPE to deliver weaker returns than Ethereum and Zcash from current levels. The view follows months of position changes, including his full exit from HYPE in June. HYPE is pulling back toward the moving average that has supported its entire 2026 rally. Ethereum’s deep discount to its record high is central to the Hayes argument. Arthur Hayes, the BitMEX co-founder who now serves as chief investment officer of crypto fund Maelstrom, said in an October 16 interview that Hyperliquid’s HYPE token could underperform Ethereum (ETH) and Zcash (ZEC), pointing to growing competition among decentralized perpetual futures exchanges, platforms where traders open leveraged bets on prices without an expiry date. A week later, HYPE trades near $78.26, about 20% below its $97.99 record after four straight weeks of lower highs. Hayes added that he respects what the Hyperliquid team has built and would still use its products, but he no longer wants to own the token, which makes the comment the latest step in a shift that started in June.
From a $150 Target to a Full Exit Hayes on HYPE in 2026
● March: Discusses a $150 HYPE scenario ● May: Names HYPE, NEAR and ZEC his “holy trinity” ● June 4-5: Sells HYPE, NEAR and then ZEC ● August: Calls ETH his preferred trade ● October 16: Says HYPE could lag ETH and ZEC In March, Hayes argued that record open interest in HIP-3 markets, which let developers list new perpetual contracts on Hyperliquid, could carry HYPE to $150. By late May he was grouping it with NEAR and ZEC as his favorite trio, praising the token’s revenue model and its access to traditional assets. Less than two weeks later, on June 4, he sold his HYPE and NEAR positions, citing higher energy prices, the risk that large AI listings would pull liquidity away from crypto and a weaker macro backdrop. A day later he exited ZEC as well, saying a vulnerability in Zcash’s Orchard pool meant the network could not cryptographically prove that extra coins had never been created.
The speed of the reversal drew criticism, and on-chain investigator ZachXBT accused Hayes of using his followers as exit liquidity. In August, Hayes disclosed that Maelstrom had bought HYPE in the low $30s and sold around $75, adding that ETH could rise three to five times relatively quickly. By the October 16 interview, ETH and ZEC were back at the center of his thinking, despite his June exit from Zcash.
Why ETH Looks Cheaper on His Math The case rests on relative valuation, since Hyperliquid generated roughly $429 million in revenue between January 1 and September 15, and nearly all protocol fees go toward buying HYPE on the open market, which ties the token directly to trading activity. Investors now widely recognize that link, so in Hayes’ view much of the success is already reflected in the price. Rival perpetual exchanges pose the specific risk: every share of volume they win reduces the fees Hyperliquid collects, and with them the size of the buybacks that support HYPE.
Ethereum sits on the other side of that trade, since it remains the main settlement layer for decentralized finance yet has lagged smaller assets for most of the past year, and it trades about 51% below its August 2025 peak. His Zcash thesis is different in kind, built on the idea that financial privacy gains value as governments, large tech companies and AI systems track more economic activity. Both are investment views, and ZEC in particular carries its own liquidity and regulatory risks.
HYPE Leans on Its 21-Week Average HYPE/USDT weekly chart. Source: Alexander Stefanov / TradingView The 21-week exponential moving average at $72.85 has guided the whole 2026 advance. HYPE reclaimed it in January, has closed above it every week since and bounced off it in July before the August breakout. The same line marked the turn in late 2025, when losing it in October and November preceded a three-month slide to $20. Together with the 0.382 Fibonacci retracement at $68.38, it forms a $68.4-72.9 support band that also overlaps the range where price spent most of May through July.
Momentum has weakened even as HYPE set a far higher high in September than in June, yet the relative strength index peaked near 83 in late May and reached only about 70 at the record, meaning buyers pushed with less force on the final leg. The reading now sits at 56.2, below its signal line, although still above 50, which fits a cooling trend rather than a reversal. A weekly close below $68.4 would point to $59.24 and then the $50-51 area, where the 0.618 level meets the rising 50-week average. Holding the band and reclaiming $85-88 would reopen a test of $97.99, with $119.07 as the next extension above it.
ETH Is Stuck Between Two Averages ETH/USDT weekly chart. Source: Alexander Stefanov / TradingView Ethereum trades at $2,407.69, inside a narrow cluster formed by the 50-week EMA at $2,419.68 and the 200-week EMA at $2,462.74. Sellers stopped the September rally at $2,749, which is both the 0.618 Fibonacci level and the measured target of the double bottom ETH built near $1,550-1,600 in June and July. Volume during the pullback has stayed below the August breakout, suggesting profit-taking rather than heavy selling, while the RSI at 52.85 shows no clear direction. A close above $2,463 would turn the cluster into support and open a second test of $2,749, then $3,171. Repeated closes below the 50-week average would send price back toward the $2,149 neckline.
ZEC Defends a Month-Long Floor ZEC/USDT weekly chart. Source: Alexander Stefanov / TradingView Zcash bounced 9.25% this week to $1,235.40, extending a four-week stretch in which every weekly low held above the 0.382 level at $1,047.48. The upper wick to $1,368 shows sellers remain active above the 0.236 level at $1,289.17. ZEC trades about 90% above its 50-week EMA, and its RSI peaked near 78 at the September record versus roughly 95 during the November 2025 rally, a gap that marks weaker buying pressure at higher prices. A close above $1,289 would put the $1,680 record back in view, with $2,130 beyond it. Losing $1,047 would expose $852, then the $647-657 zone where the 0.618 level and the 50-week average meet.
Sunday’s Closes Will Test the Rotation The weekly candles close on Sunday, October 25. If HYPE ends the week below $72.85 while ETH settles above its 200-week average, the charts would show the rotation Hayes describes, with money moving from a token near its highs toward one still far below. Hyperliquid’s buyback size depends directly on its share of perpetual trading volume, so monthly market share data across decentralized derivatives venues offers a more concrete test of the competition argument than price alone.
Hayes has reversed course on all three tokens within months this year, and blockchain analysts track wallets linked to him and Maelstrom closely. Any renewed buying of HYPE, or new selling of ETH or ZEC, would likely appear in on-chain transfer data before he comments on it publicly.
Alex is a financial markets journalist and co-founder of Millennial Media Group, and he's spent close to ten years trying to answer one stubborn question: what's really driving this? It started in 2016, when Bitcoin refused to make sense to him - and rather than shrug, he stayed with it until it did. That patience became his method. He's less interested in what an asset is doing today than in the plumbing behind it: how liquidity flows, where risk hides, what a chart is quietly telling you that the headline isn't. That lens eventually stretched well past crypto into traditional markets, because the same forces - fear, leverage, incentives, timing - show up everywhere once you know how to look. Most coverage, in his view, insults the reader by stopping at the surface. Price up, price down, moving on. He'd rather leave someone genuinely understanding a move than merely informed that it happened. His path into markets ran through a Tourism degree at New Bulgarian University - proof, maybe, that curiosity beats credentials. With more than 200 deep analyses and over 10,000 articles behind him, he still walks away from most trading days having learned something he didn't know that morning.
Bitcoin (CRYPTO: BTC) held roughly 57% of the digital asset market as of Oct. 10, its highest share since November 2022, according to Glassnode and Fasanara Digital.
Why Capital Stayed Concentrated in BitcoinGlassnode and Fasanara Digital wrote in the report that smaller tokens fell roughly 52% from their October 2025 peak, about 18 points worse than large-cap assets.
That breaks from past cycles, where Bitcoin gains typically spread into smaller coins over time. Ethereum’s market share slipped to 11% over the same stretch, now roughly matching stablecoins.
Bitcoin’s realized capitalization, a cost-basis measure of capital held in the network, posted its first positive month in nine during August, after falling $44.5 billion from its November 2025 peak.
The report’s liquidation model helps explain why: estimated short exposure in the $65,000 to $70,000 range collapsed from $7 billion to just $344 million within two days during August’s rally, suggesting forced buying kicked off the move before genuine demand took over.
Why Corporate Treasuries Are Shifting Toward EthereumCorporate Ethereum (CRYPTO: ETH) holdings grew 43% since December 2025, compared to 21% for Bitcoin and just 7% for Solana (CRYPTO: SOL), with Ethereum treasuries now holding roughly 6.6% of total supply.
The report attributed Ethereum’s edge partly to staking income, while Solana treasury accumulation has largely stalled.
Bitcoin corporate holdings remain far more concentrated than Ethereum’s. Strategy (NASDAQ:MSTR) held 848,000 BTC, about two-thirds of all disclosed corporate Bitcoin holdings, and accounted for nearly all of the 180,000 BTC that named companies added this year.
Spot Bitcoin ETFs held 1.3 million BTC, just 6% below their October 2025 peak, with BlackRock’s (NYSE:BLK) IBIT making up 62% of that total.
Why Traditional Assets Are Moving Onto Crypto RailsPerpetual futures tied to stocks, indices and commodities jumped from $23.5 billion in monthly volume in November 2025 to $778 billion in August 2026, a roughly 33-fold increase.
Their share of total perpetual trading rose from 0.5% to 23.5%, with Binance capturing about 55% of that volume in August despite entering the category after rivals.
On Hyperliquid, perpetuals tied to traditional assets now trade at roughly four-fifths the volume of the platform’s own Bitcoin contracts, up from under 1% in late 2024.
What Would Confirm the RecoveryThe report outlined four signals needed to confirm a sustained rebound: ETF inflows continuing into a third straight month, positive Binance spot buying pressure holding steady, futures open interest rebuilding in BTC terms, and Glassnode’s market indicators shifting into warmer territory.
As of early October, 56% of the firm’s 45 tracked indicators sat neutral, with fewer than one-fifth reading warm or hot.
Image: Shutterstock
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In brief
Ethereum developers have called off Monday's Glamsterdam upgrade on the Hoodi testnet after auditor ChainSecurity flagged security issues with its gas changes.
The firm said the changes could let some smart contracts permanently record failed operations that their code was designed to keep retryable.
ChainSecurity said it has found 13 real-world examples and is contacting affected projects, as the Ethereum Foundation assesses how many contracts are exposed.
Ethereum developers have postponed the planned activation of the network's Glamsterdam upgrade on its Hoodi test network after security firm ChainSecurity found problems with how the upgrade changes gas, the auditor said on Thursday.
"It has just been decided to delay the Glamsterdam hard fork on the Hoodi testnet because of security impacts we identified," ChainSecurity wrote, adding that it had "already found 13 real-world examples" and was in responsible disclosure with the affected projects.
⚠️ It has just been decided to delay the Glamsterdam hard fork on the Hoodi testnet because of security impacts we identified in this blog post: https://t.co/UCpy6Jp5Pa
We already found 13 real-world examples and are in responsible disclosure with the affected projects.
Please…
— ChainSecurity (@chain_security) October 22, 2026
The upgrade had been due to go live on Hoodi on Monday. Node operators should revert to an older software release without the upgrade scheduled, or wait for their execution client team to release a new version that cancels it, Ethereum researcher Christine Kim said. Preston Van Loon, a developer on the Prysm consensus client, said a Prysm release removing the upgrade from Hoodi's schedule would follow the same day.
Gas is the fee paid for computing work on Ethereum. Glamsterdam changes how the network charges for creating and accessing stored data through two proposals, EIP-8037 and EIP-8038, and introduces a separate pool of gas for creating new state.
Myriad: Where does ETH go next? Click to make your prediction.According to ChainSecurity's analysis, those changes break assumptions that many contracts rely on when an external call fails. Some contracts use gas checks, or rely on the call running out of gas, to stop an attacker from deliberately supplying too little gas so that a valid operation fails and is recorded as a permanent failure, a tactic known as insufficient gas griefing.
Under Glamsterdam, gas can be refilled or returned to a contract after a failed call, and repricing can change how much gas a call needs, the firm found. "Even with unchanged contract code, a failure path that previously reverted can now complete," it wrote. ChainSecurity urged projects to check their contracts, saying the Ethereum Foundation is working out how many are affected.
Glamsterdam's road to mainnetGlamsterdam has already gone live on Sepolia, another Ethereum test network, which activated the upgrade on October 6 and began producing blocks with a gas limit of nearly 200 million, more than three times mainnet's 60 million. The upgrade also adds block-level access lists, which let computers check transactions in parallel, and moves the auction that decides who assembles each block into Ethereum's own rules.
Developers had aimed to ship Glamsterdam on mainnet by the end of 2026, ahead of Hegotá, the next upgrade, which is expected in 2027 and could add native privacy features. No new date has been set for the Hoodi fork.
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Ethereum price has remained under pressure near $2,400 on October 23 as renewed ETF withdrawals, selling by an early investor and cautious market sentiment complicated the cryptocurrency’s recovery.
Summary
Ethereum traded near $2,395 on October 23 as sellers kept ETH below $2,500. U.S. spot Ethereum ETFs recorded $110.6 million in withdrawals on October 22. Ethereum developers postponed Glamsterdam’s Hoodi testnet activation while investigating smart-contract compatibility risks. Lookonchain reported that an early investor sold 3,000 ETH worth approximately $7.2 million. Ethereum’s RSI stood at 39.83, with $2,350 support and $2,500 resistance in focus. According to crypto.news market data, ETH traded around $2,394.57, down approximately 0.25% over 24 hours, with trading volume near $11.62 billion. The cryptocurrency has struggled to regain $2,500 after retreating from its October highs, while buyers attempt to stabilize prices above $2,350.
Why is Ethereum price down today? Ethereum’s latest weakness coincided with another round of withdrawals from U.S. spot exchange-traded funds. According to SoSoValue data, U.S. spot Ethereum ETFs recorded approximately $110.6 million in net outflows on October 22, with BlackRock’s ETHA reportedly accounting for a significant share of the withdrawals.
U.S. spot Ethereum ETFs flows, source: SoSoValue The withdrawals followed a difficult period for institutional demand. During October 12–16, Ethereum ETFs lost roughly $320 million, according to data examined in previous ETF flow coverage. BlackRock’s fund accounted for nearly $299 million of those weekly withdrawals.
Beyond investment products, renewed geopolitical tensions and elevated oil prices weighed on cryptocurrency sentiment. Bitcoin remained near $81,500 at press time, suggesting that Ethereum’s decline occurred alongside weakness across major digital assets.
Ethereum price history shows an October trading range between approximately $2,335 and $2,754. With ETH trading below its monthly opening level near $2,685, buyers have struggled to recover the losses accumulated during the month.
Ethereum’s Glamsterdam upgrade faces testnet delay Another development attracting attention was the postponement of Ethereum’s Glamsterdam upgrade on the Hoodi testnet. The Ethereum Foundation confirmed the delay on October 22 after developers identified potential compatibility concerns involving EIP-8037 and existing smart contracts.
The upgrade had been scheduled for October 26, but developers withdrew that activation date while they investigate the issue. The associated proposal to raise Hoodi’s gas limit to 200 million was withdrawn from the planned activation.
As crypto.news reported on Glamsterdam, the postponement concerns the testnet schedule, not a failure of Ethereum’s mainnet. Developers have not announced a replacement Hoodi activation date or confirmed when Glamsterdam will reach mainnet.
The Ethereum Foundation advised Hoodi node operators and validators to review their client configurations before October 26. Ordinary ETH holders and mainnet users do not need to take action because of the schedule change.
Early Ethereum investor sells 3,000 ETH after nine years Meanwhile, blockchain analytics firm Lookonchain reported that an early Ethereum investor sold 3,000 ETH worth approximately $7.2 million after holding the tokens for nearly nine years.
The wallet reportedly acquired the cryptocurrency for around $56,000 when ETH traded below $19. At the reported sale value, the position generated proceeds equivalent to roughly 129 times its original purchase cost, excluding transaction expenses.
Other longtime holders have moved significant amounts of Ethereum during October. One investor deposited 6,369 ETH worth approximately $16 million to Kraken, while another transferred 13,330 ETH to Coinbase.
Such deposits can indicate preparations to sell, although exchange transfers alone do not prove completed sales. Previous Ethereum whale transaction reporting documented large transfers by early holders without establishing that every deposit resulted in market selling.
Ethereum price prediction: Can ETH hold $2,350? The Ethereum price TradingView-style daily chart showed ETH trading at $2,398.79, gaining 0.40% during the chart session. Despite that modest recovery, the cryptocurrency remained below $2,500, with its technical indicators continuing to favor sellers.
The Relative Strength Index stood at 39.83, slightly below its moving average of 40.24. The indicator remained above the oversold threshold of 30, suggesting that selling momentum had moderated without confirming a sustained recovery.
Ethereum price chart, source: crypto.news Meanwhile, Bull Bear Power registered -102.25, showing continued bearish pressure. The contraction in negative histogram bars indicated that sellers were losing some momentum compared with previous sessions.
Crypto analyst CryptoBusy identified $2,350–$2,480 as an important support region. A recovery above $2,500 could bring $2,800 into consideration, while losing $2,350 could expose $2,200.
$ETH is trading around $2,420, testing a major ascending trendline and the $2,350-$2,480 support zone on the daily chart.
This is an important area for ETH after its recent correction from $2,700.
If buyers defend $2,350, ETH could recover toward $2,500, with $2,800 as the next… pic.twitter.com/Og1oOcmkxe
— CryptoBusy (@CryptoBusy) October 23, 2026 Another analyst, Ella, identified $2,375–$2,390 as an immediate support area. Her analysis placed $2,425 and $2,460 as recovery levels, with $2,330 becoming relevant if support fails.
Moreover, trader Ted Pillows noted that ETH remained below its 50-day simple and exponential moving averages. He said buyers would need to reclaim those indicators with stronger spot demand before the technical picture improves.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
The October 26 Hoodi test has been pulled, including its planned 200 million gas limit. Developers are examining a repricing proposal against contracts already on mainnet.
Summary
Ethereum’s developers postponed Glamsterdam’s October 26 Hoodi activation at epoch 132,352, with no replacement date set.
The delay follows questions about how EIP-8037, which raises the cost of creating chain state, interacts with existing mainnet smart contracts.
The Amsterdam execution and Gloas consensus activations were both removed from Hoodi’s schedule, along with the planned move to a 200 million gas limit.
Ethereum’s earlier transaction replay found most contracts unaffected, but flagged a small set relying on fixed gas stipends, hardcoded limits or remaining-gas logic.
Hoodi operators must check execution and consensus client instructions so their software does not still activate the old fork on October 26.
Ethereum has called off a test that was due to run next Monday. The Ethereum Foundation’s October 22 notice says Glamsterdam will not activate on Hoodi at 17:42:48 UTC on October 26, and no new epoch has been set. The accompanying gas-limit increase to 200 million has been taken off the testnet’s schedule as well. This is a postponement of future configuration, not a reversal of blocks already recorded by Hoodi.
Developers made the decision to investigate how EIP-8037, a change to the price of creating new Ethereum state, interacts with contracts on mainnet. The Foundation has not said the upgrade has broken mainnet. It has not put a date on a production fork either. The immediate operational risk is on Hoodi: clients or custom configurations still carrying the old activation time could disagree with the revised schedule. The deeper question is how to change the cost of work inside a transaction without upsetting applications that embedded the old numbers in code.
Hoodi’s October 26 fork is off the calendar
The October 16 Hoodi announcement specified epoch 132,352 and slot 4,235,264. It paired the execution-layer Amsterdam changes with the consensus-layer Gloas changes and a 200 million gas limit. The new notice supersedes those instructions in full. Operators should read the latest release notes for both types of client; an earlier release described as Glamsterdam-compatible may still contain the now-cancelled Hoodi activation.
JUST IN: Ethereum delays Glamsterdam upgrade on Hoodi testnet
The Ethereum Foundation postponed the Oct. 26 activation to review how EIP-8037 interacts with mainnet smart contracts, with no new date announced. pic.twitter.com/F2HmXs1meR
— crypto.news (@cryptodotnews) October 23, 2026
That is more than a scheduling footnote. A validator needs to follow the same network rules as its peers. If part of its software expects new execution rules or consensus duties at the old epoch while the network does not, it can lose the ability to follow the canonical chain. Builder and validator infrastructure may have their own configuration. The Foundation therefore tells operators to verify revised client versions and remove stale custom settings before October 26, rather than assume that doing nothing is safe because a fork was delayed.
Sepolia activated Glamsterdam on October 6 and tested a 200 million gas limit, as coverage of that activation recorded. One testnet’s successful activation is useful but not conclusive for another. Hoodi’s remaining rehearsal has been postponed precisely because the contract investigation needs time. There is no published replacement timestamp to extrapolate into a mainnet date.
Glamsterdam activated on Sepolia on October 6, where developers tested a 200 million gas limit. The successful test does not settle how EIP-8037 will affect contracts already running on mainnet. Hoodi’s rehearsal is postponed while developers investigate those interactions, and no replacement date has been announced.
The sequence has changed more than once this year. September reporting on the Sepolia plan described devnet problems and an EIP-8037 implementation issue before the public test proceeded. Those earlier problems are not proof of the same cause as the October 22 contract inquiry. They show why the dates have been conditional as client teams move from private trials to public networks. Separate concerns about builder behavior on testnets concern another part of Glamsterdam and should not be conflated with repricing. The latest notice gives one specific reason for the Hoodi pause: further investigation of EIP-8037’s interaction with mainnet contracts.
Why creating state costs more in the proposal
A transaction can execute calculations and it can leave data that the network must retain and access later. Creating a new account, opening a new storage slot or deploying contract bytecode adds to that persistent state. EIP-8037 proposes charging more for those operations and metering the state-creation part separately. The aim is to put the price closer to the longer-lived burden on nodes, especially if blocks are allowed to carry more work.
The proposal’s illustrative table puts a new account’s state-creation component at 183,600 gas, compared with a current 25,000; a new storage slot at 97,920, compared with 20,000; and a 24 kilobyte deployment at 37,784,880, compared with 4,947,200. The table is not a universal prediction of the ETH fee a user will pay. It isolates a component under a proposed constant, with other execution charges on top, and the final currency cost depends on the gas price at the time. The size of the change explains why contracts with tight limits deserve a closer look.
A related state-access proposal, EIP-8038, reprices some reads and writes. The Foundation’s developer impact guide says these gas costs were last substantially adjusted in the Berlin fork in 2021, while the state has grown. The planned repricing was designed alongside work to raise throughput; making blocks larger without accounting for expensive state operations could make validation harder for node operators. The pause therefore touches both application compatibility and the scaling plan, although its announced trigger is the EIP-8037 interaction.
An external call shows why this can be difficult to notice in advance. A caller may deliberately pass only enough gas for a recipient to perform a limited action, assuming that any further work will fail safely. If a repriced account or storage access now consumes that allowance, the recipient may fail during a routine payment, even though the user supplied plenty of gas to the outer transaction. Changing the wallet’s estimate does not rewrite the internal allowance. Developers need to inspect the code path and the failure handling around it, because some applications regard a failed external call as a reason to revert while others continue and record a different outcome.
The Solidity transfer and send patterns historically forward a 2,300-gas stipend. Many teams have already moved away from relying on that stipend, but deployed contracts can remain in use for years. The Foundation identifies fixed stipends as one risk category; it does not say every call using them will fail. A recipient that performs little work may remain within the allowance, while a contract that touches newly repriced state can exceed it. Testing actual counterparties matters more than treating the mere presence of a function name as proof of breakage.
A second class of problem lies in automation. Wallets, relayers and custodians may store default gas limits for regular tasks. An operation that ran successfully for years could start running out of gas even though the application contract itself is sound. Raising an estimate at the frontend can fix that route, but a scheduled agent or a customer using an older wallet may continue to submit the previous limit. Developers therefore have to identify not only the affected code, but also the services that construct transactions for it.
Which contracts can run into trouble?
The Foundation replayed historical mainnet transactions under the proposed schedule. Most had no meaningful problem. Of the flagged cases, many completed after their gas limit was raised; a smaller group could fail even with substantially more gas. A fixed stipend, a hardcoded amount of gas sent into another contract, or a branch based on the result of gasleft() can change the path a transaction takes. The earlier contract warning described those categories before Hoodi acquired its October date. The current postponement makes the unanswered cases urgent, but it does not show that all Ethereum contracts are vulnerable.
Consider an application that sends funds to another contract while providing a fixed gas allowance. The receiving contract may need more gas under the new schedule to touch storage. If the caller’s allowance is embedded in deployed code, simply raising the top-level transaction limit may not give the receiving call more room. A failure could then require a contract-level fix or a different route for users. By contrast, if the only problem is that a wallet estimated a transaction using old prices, updated estimation and a higher supplied limit may be sufficient. The two cases are operationally distinct.
JUST IN: Vitalik Buterin says Ethereum should move cryptography off-chain
He argues that heavy computations should be proved with STARKs off-chain and verified through EIP-8288, reducing blockchain data demands while letting developers use different cryptographic systems without… pic.twitter.com/6wn2Gi1s8g
— crypto.news (@cryptodotnews) October 19, 2026
A particularly unusual EIP-8037 issue involves code that measures work by subtracting two readings of remaining gas. The proposal explains that the state-gas reservoir can make gasleft() rise under some circumstances. A calculation expecting a nonnegative decrease could behave differently, and immutable deployed contracts cannot be patched in place. The precise impact depends on the code and transaction path, which is why a replay of actual historical transactions matters more than a generic warning about higher fees.
The Foundation’s search tool lets builders examine affected contract addresses and the reason for a flagged divergence. It recommends testing on a devnet using the new schedule and inspecting code that assumes fixed limits even when a contract does not appear in the list. A historical replay is a screen, not a full inventory of future behavior: a route that no user called during the sample could still contain a vulnerable assumption. Teams need their own tests for the branches they operate.
The result of a replay also depends on the transaction sample. A contract may contain a fixed gas allowance in a function that has rarely been called; if that route is absent from the replayed history, the tool cannot demonstrate its failure. The Foundation advises maintainers to check code even when its address does not appear in the affected list. A large application may have several contracts, upgradeable frontends and automated agents, each supplying a different gas limit. The team needs to test the operation as its users actually invoke it, including a wallet or bot that may be holding an old estimate in a cache.
For a contract whose behavior changes, fixing the interface that submits transactions is not always enough. If an internal call’s gas allowance was compiled into immutable code, its owner may need a migration to a new contract. Such a migration can involve moving balances, approvals or user permissions, and communicating the new address. The difficulty depends on the product’s design; there is no evidence that every flagged contract requires that work. This is precisely why the distinction between a limit-fixable failure and a potentially broken contract matters to both the team and its customers.
The testing guidance is especially relevant to applications that use account abstraction or multiple contract calls to complete one user action. A checkout may approve an asset, route a swap and settle a merchant in one sequence. If an internal step uses a hardcoded allowance, the customer can see a failed payment without knowing which contract hit the limit. Replaying the whole sequence under the proposed rules is more informative than checking each contract’s public method in isolation. Maintainers should record the first failing step and whether a larger outer gas limit actually changes the outcome.
Contracts can also behave differently after a failed call rather than simply stopping. A fallback that logs an event, credits an internal balance or tries a second route may continue under conditions its original authors never expected. Such divergence is why a test result described only as “transaction succeeded” can be inadequate. The output state and events need comparison with the old execution. The Foundation’s category of successful execution with changes captures this possibility without declaring it automatically harmful.
Wallets, RPCs and factories face different work
Wallets and remote procedure call providers estimate the gas a transaction needs before a user signs. EIP-8037 says eth_estimateGas and node software must account for both execution gas and the new state-gas dimension. An old cached constant can underestimate a state-heavy transaction. Users may then see failed transactions, even if the contract would work with a properly estimated limit. Infrastructure updates are therefore part of compatibility, not merely a convenience layered over the protocol.
Deterministic deployment factories present another narrow case. EIP-8037 discusses factories originally placed at standard addresses using presigned transactions with hardcoded gas limits. On a fresh network that adopts the new schedule before the factory exists, the old presigned deployment could run out of gas. The proposal explicitly says already-deployed instances on existing mainnet and layer 2 networks are not affected by that particular genesis scenario. Reporting the caveat matters: it would be misleading to suggest that every factory already used on Ethereum is about to vanish.
Builders also need to distinguish an unchanged contract from unchanged costs. A transaction may succeed but consume a different amount of gas. A business that batches deployments or creates many storage slots could face a materially different cost structure even when no function fails. Its product may need different fee quotations, a revised subsidy policy or a change in how it stores information. The Foundation’s replay categories separate identical execution, changed but successful execution, limit-fixable failures and potentially broken contracts for just that reason.
The numbers in EIP-8037 deserve another qualification. Its example converts proposed gas to ETH using an assumed base fee of 0.08 gwei. If the base fee changes, the ETH paid for the same gas changes too. A developer comparing the table with an existing bill must add execution charges and the actual transaction conditions, rather than present a sevenfold state-cost change as a sevenfold increase in a user’s complete payment. The proposal’s purpose is to assign costs to resources; a person’s final fee depends on the mix of those resources in the transaction.
The scale of proposed repricing should be read alongside the capacity objective. More room for transactions in a block can make the network expensive to validate if those transactions disproportionately create persistent state. EIP-8037 assigns a separate meter to that growth so the cost does not disappear inside a larger headline gas limit. EIP-8038 addresses accesses to existing state. They solve different parts of the resource question, and a working block builder alone cannot establish that applications handle the repricing correctly.
Ethereum’s block access lists have a separate task. They tell clients which accounts and storage locations a block touches, helping organize some validation work in parallel. That may allow greater throughput under favorable conditions, but it does not erase the persistent storage added by new accounts and slots. A testnet needs to run the combined upgrade under realistic activity because an improvement in one dimension can expose a constraint in another. The postponement leaves that combined Hoodi exercise undone for now.
Many users will first encounter these changes indirectly, through their wallet’s quoted gas limit or an application’s fee estimate. A transaction that creates no new state may see a different effect from one deploying a sizable contract. A trading interface that promises a fixed transaction cost would need to check whether its promise still covers the operations it performs. Generalizations about all Ethereum fees moving in one direction would be premature without a final mainnet schedule, observed demand and the final parameters.
The 200 million figure was a testnet setting
Glamsterdam combines more than repricing. Enshrined proposer-builder separation changes the handoff of a block payload, while block-level access lists help clients identify the accounts and storage a block will touch. Developers planned to test those changes with a 200 million Hoodi gas limit, matching Sepolia. The figure was a testnet parameter. It was never a promise that Ethereum mainnet would immediately adopt the same limit or that user fees would fall by a certain percentage.
Removing the Hoodi gas-limit schedule keeps the postponed fork’s components together. Operators will not be testing the intended higher capacity under Glamsterdam on that network next Monday. Developers can still use Sepolia and purpose-built devnets to investigate the effects of repricing. The missing Hoodi rehearsal affects the sequence in which client teams can gain confidence before choosing a mainnet time, but the Foundation has not published a revised production timetable.
The economics are less straightforward than a slogan about cheaper gas. Charging more for creating durable state can make a particular transaction costlier at the same gas price. A larger safe capacity, if later adopted and used, could ease congestion in other conditions. Demand determines how much block space users bid for, and the final protocol settings determine which operations become more or less expensive. Neither the pause nor a successful test would settle those market variables by itself.
Public coordination has costs, but proceeding with a known uncertainty can have greater ones. Operators prepared software for the old epoch and now must remove that schedule; application developers have to keep testing against a proposal whose final shape may change. The cost of that reset is visible. A mainnet rule that caused a widely used contract to fail would be harder to reverse, and the fallout could involve funds or dependent applications. The October 22 notice does not quantify such a risk, but it makes clear that developers regarded the interaction as important enough to halt the Hoodi rehearsal.
A revised proposal could preserve the objective of charging for state while changing the way the gas reservoir works or the transition rules for existing contracts. It could instead keep the specification and require targeted application fixes. No public decision between those routes appears in the postponement notice. Readers should resist treating an investigation as a final design choice. The precise amendments, if any, will matter more than how many days Hoodi waits.
Why developers chose to wait
Ethereum’s process lets client teams adjust a plan before a public testnet activation. The October 22 decision at All Core Devs Execution call 248 follows earlier warnings and outreach to affected builders. The public notice identifies the area under investigation but does not publish a final count of contracts at risk, a new version of EIP-8037, or a date on which the inquiry will end. Calling the delay a confirmed flaw in all deployed contracts would go beyond the release; calling it a routine calendar shuffle would miss its stated cause.
The old configuration has to be withdrawn across both layers. Execution clients process transactions and state, while consensus clients coordinate validators and the fork schedule. A network can only test the upgrade if those clients agree on the rules and timing. Hoodi operators who installed releases specifically for October 26 must look for the revised release notes. The Foundation says it will add links to new client versions as they are confirmed, rather than treating its original compatibility table as current.
There is also a lesson in the order of evidence. Replaying history revealed a small affected group; public testnets reveal client and application behavior in a live setting; mainnet exposes the final rules to economic use at scale. Each stage answers something the preceding one cannot. A short delay on Hoodi may buy time for the contract work, but it does not itself prove the eventual rules are safe. The decision to proceed should follow test results and clear operator instructions.
The scope of the operator notice is worth spelling out. An ordinary mainnet holder does not need to change a wallet because Hoodi’s schedule was withdrawn. A Hoodi node operator who prepared for the fork does need to revisit release notes. A protocol engineer investigating the EIP needs to determine whether the contract behavior found in replays is acceptable, fixable by tooling, or a reason to alter the proposal. An application team needs to test its own execution routes. Those are different audiences with different deadlines, and a single “upgrade delayed” alert does not give each of them the right instruction.
The next Foundation post can also resolve how developers will communicate with affected teams. Its August guide said direct outreach had begun, but an outreach count alone would not establish that a contract was repaired. The testable evidence is an updated contract, revised gas configuration or documented fallback for a particular product. Some immutable contracts may require a user migration, which raises a separate communication and security concern: customers must know where a legitimate replacement lives and avoid fraudulent addresses. No mass migration has been announced, so this remains a contingency for teams whose code cannot be changed in place.
What comes before another date
A revised schedule should say which EIP-8037 rules will be tested, what changed if the proposal is amended, and which client versions agree on the new Hoodi epoch. Application maintainers need time to run affected-contract searches, update estimators, raise limits where that is sufficient and examine hardcoded internal call allowances where it is not. If a potentially broken deployed contract has no direct upgrade path, its team may need to explain how users will reach a replacement before any mainnet fork.
Public evidence would include the replay methodology and updated affected-contract findings, results from devnets with the final gas schedule, a Hoodi activation with diverse clients in agreement, and a separate mainnet announcement. Even a clean Hoodi activation would be a rehearsal, not a guarantee of a specific ETH price or final transaction fee. The practical story for users is that no October 26 mainnet action has been announced. The immediate action belongs to Hoodi operators and teams whose applications make assumptions about gas.
What to watch
Client releases: Execution and consensus updates that explicitly remove the old October 26 Hoodi activation.
EIP-8037 findings: New replay results, changes to the proposed gas rules and the treatment of contracts with hardcoded limits or gasleft() logic.
A replacement epoch: A dated Hoodi plan that restores a testable configuration after the investigation.
Application fixes: Reports from affected builders explaining whether higher limits suffice or deployed code needs another route.
Mainnet notice: A distinct production schedule from the Foundation after the testnet sequence and client coordination.
FAQ
Is Glamsterdam activating on Hoodi October 26?
No. The Ethereum Foundation postponed the October 26 activation and has not set a replacement epoch or time.
Did Ethereum mainnet change on October 22?
No. The notice changes a future Hoodi testnet schedule. It does not revert Hoodi’s existing history or activate Glamsterdam on mainnet.
Why was the test delayed?
Core developers want more time to investigate EIP-8037’s interaction with existing mainnet smart contracts, according to the Foundation.
What is EIP-8037?
It raises and separately meters gas charged for creating persistent state, including accounts, storage slots and deployed code. Its exact fee impact varies by transaction and gas price.
Does every smart contract need a change?
No. The Foundation says the large majority in its historical replay were unaffected. A small set with fixed gas assumptions deserves direct testing and, in some cases, a fix.
Will Hoodi’s gas limit rise to 200 million on October 26?
No. The scheduled increase was removed along with both parts of the Glamsterdam activation on Hoodi.
What should a Hoodi validator operator do?
Check updated execution, consensus and validator-client instructions. Old software or custom configurations may still carry the cancelled activation time.
Is there a new mainnet date?
No. A separate production announcement will be needed after testing and client teams agree on the schedule.
Disclaimer: This article is for information and educational purposes only and does not constitute financial or investment advice. Figures reflect regulatory filings and reporting available at the time of writing and change with each disclosure. Nothing here is a recommendation to buy, sell, or hold any security or asset. Always do your own research. Information is accurate as of October 23, 2026.
Ethereum developers postponed the October 26 Glamsterdam activation on the Hoodi testnet. ChainSecurity identified 13 real-world cases of potential smart contract security risks. The postponement removes Hoodi’s planned gas limit increase to 200 million. Developers have not confirmed new Hoodi or mainnet activation dates. ETH trades below $2,400, with traders watching the $2,370 support and $2,415 resistance levels. Ethereum developers postponed the Ethereum Glamsterdam upgrade on the Hoodi testnet after researchers found possible risks to smart contracts. They canceled the October 26 activation as ETH traded below $2,400. The Foundation has not set another test date.
Ethereum Glamsterdam Upgrade Misses October 26 Target The Ethereum Foundation announced the decision on October 22 after a developer meeting. The review centers on EIP-8037, which changes gas charges for creating blockchain data and could affect deployed contracts.
Ethereum postpones the Glamsterdam upgrade and cancels Monday's Hoodi testnet activation after security developers flagged risks to existing contracts.
Just another reminder that protocol upgrades can be fragile.
— lenny 🥷 (@blockchainlenny) October 23, 2026
The postponement removes Amsterdam and Gloas activations from Hoodi’s configuration, alongside a planned increase in its gas limit to 200 million. The Foundation said existing transactions and Hoodi’s chain history remain unchanged.
Security Review Focuses on Failed Contract Calls On October 13, ChainSecurity warned that EIP-8037 and EIP-8038 could alter responses to failed transactions. Certain contracts check remaining gas to decide whether an unsuccessful operation should stop or continue. Older contracts may rely on those checks for security.
Under the proposals, failed operations might leave contracts with enough gas to continue. An application could then record failure without allowing retries. The change could block users from retrying requests.
ChainSecurity identified 13 real-world examples of contracts that might face such problems. It has not named the applications while contacting affected projects privately. A separate report on Glamsterdam gas concerns examined the findings. Developers are assessing whether the rules need changes.
Hoodi Operators Await New Test Schedule Glamsterdam activated on the Sepolia testnet on October 6. Hoodi was the next planned testing stage before mainnet deployment. Developers have not confirmed a December mainnet launch.
Hoodi node and validator operators must check updated software instructions before October 26. Both client types must remove the canceled activation. Mainnet users and ETH holders need no action, according to the Foundation.
Ethereum Price Holds Near $2,400 ETH traded between $2,370 and $2,415 during the reported session, declining around 0.5%. Separately, Ethereum holders staked 35.9% of the supply in the third quarter, according to a Bitwise report.
ETH remains near $2,400. An earlier Ethereum support analysis identified $2,350 as another level to watch. The price levels reflect market trading, not a confirmed response to the Hoodi decision. A move above $2,415 would clear the reported range, while a fall below $2,370 would mark renewed selling pressure.
Key pre-market news for U.S. stocks on Friday is as follows: 1. SpaceX’s potential merger with Tesla faces antitrust scrutiny; the company is in talks to connect 80,000 cellular sites to build a new network. 2. OpenAI is nearing completion of a new funding round, seeking to raise up to $30 billion at a pre-money valuation of $1.25 trillion. 3. California Public Employees’ Retirement System (CalPERS), the largest U.S. public pension fund, is adjusting its asset allocation: cutting direct holdings in the "Magnificent Seven" tech giants while increasing exposure to private equity. 4. SK Hynix has scrapped the pre-IPO financing and IPO plans of its subsidiary Solidigm. 5. U.S. spot Bitcoin ETFs saw a net outflow of $635 million yesterday, with Ethereum ETFs recording a net outflow of $110 million.
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