Weekly Crypto Development Glossary: Key Updates from The Protocol

Welcome to The Protocol, CoinDesk’s roundup of significant advancements in cryptocurrency technology. I’m Margaux Nijkerk, your dedicated reporter covering tech and protocols within the crypto space.

Latest Highlights in Crypto

Polyhedra Responds to Liquidity Attacks Affecting ZKJ Token

Polyhedra, a blockchain protocol, has proposed a buyback strategy aimed at restoring confidence after its ZKJ token experienced a shocking 80% decline in a matter of minutes. The team released an analysis detailing the causes of this drop, attributing it to a targeted liquidity attack on the PancakeSwap ZKJ/KOGE trading pair, significant ZKJ movements by market-making firm Wintermute, and subsequent liquidations on centralized exchanges like Bybit. Data reveals that certain addresses withdrew millions from the ZKJ/KOGE pool, with one removing approximately $4.3 million in liquidity provider tokens along with significant quantities of ZKJ. In response to the overwhelming selling pressure that overwhelmed the KOGE/USDT pool, Polyhedra intervened by infusing around $30 million worth of USDT, USDC, and BNB as liquidity into decentralized exchanges. The team confirmed that it did not liquidate any of its own ZKJ holdings. To combat future attacks, Polyhedra is conducting a thorough technical review and launching its buyback initiative to mitigate the damage caused. — Shaurya Malwa

Optalysys Launches Blockchain-Optimized Server

Optalysys, a startup based in the U.K., has unveiled what it claims to be the world’s first blockchain server capable of processing data securely and at scale without needing to decrypt it. The company’s LightLocker node utilizes Fully Homomorphic Encryption (FHE), a technology that allows computations to be done on encrypted data while maintaining encryption integrity. Recent months have seen other companies exploring FHE applications in the crypto realm, but Optalysys argues that its hardware is uniquely designed for blockchain encryption, offering a more energy-efficient solution that reduces energy consumption by 40% compared to traditional GPU systems. — Ian Allison

Ink Foundation Announces Token Airdrop

The Ink Foundation, which operates the layer two Ink network, is set to launch its native token, INK, with the objective of fostering on-chain capital markets through a liquidity-first approach. Initial distribution will occur via an airdrop targeting early adopters on a DeFi lending and trading protocol built on Aave. The foundation emphasized that there will be no governance gimmicks or variable emissions schedules associated with the token. INK is capped at 1 billion tokens, ensuring no changes can be made to its supply through governance proposals, and noted that its governance structure will remain separate from that of other Superchain participants. — Shaurya Malwa

Additional Developments in the Crypto World

An SEC filing revealed insights into the relationship between Tron DAO, Justin Sun, and SRM Entertainment, which is rebranding as Tron Inc. The document discusses a $100 million investment in public equity, fully funded with TRX tokens, that grants Sun’s father, Weike Sun, chairmanship and key governance roles to Tron-related advisors. — Sam Reynolds
JPMorgan has initiated a pilot for a controlled USD deposit token named JPMD on Base, an Ethereum layer two network developed by Coinbase. This represents the bank’s first use of its Kinexys distributed ledger technology on a public blockchain and is aimed at offering institutional clients services such as digital asset trading and transfers. — Ian Allison
The Iranian cryptocurrency exchange Nobitex suffered a breach resulting in a theft of $90 million, allegedly executed by a hacking group linked to Israel. The attackers promised to release Nobitex’s internal data and code, warning that remaining assets on the platform are at risk. — Shaurya Malwa

Regulatory Landscape Updates

A significant bipartisan endorsement in the U.S. Senate has propelled a stablecoin bill, passing with a vote of 68-30. This legislation, the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS) Act, now advances to the House, where it may face amendments before reaching the President’s desk for final approval. — Jesse Hamilton