According to this (pay-walled) article by Manmohan Singh, Caitlin Long and Charles Kahn, without access to central bank payment rails, non-bank stablecoins will be perceived (however large the high-quality liquid asset (HQLA) buffers they may propose) to be less safe than bank stablecoins. As most stablecoins are in US dollars, the US has an opportunity to exploit its (relatively) late entry into the stablecoins discussion. Allowing stablecoins from banks and non-banks chartered as banks to interoperate – not just by enabling both to have access to central bank payment systems, but also by enabling the use of public, open-source technology protocols that already interoperate with each other – will make a difference in the payments/settlements landscape. [Read more]
The Ethereum network currently has a proof-of-work (PoW) consensus mechanism and in time, the protocol plans to fully transition into a proof-of-stake (PoS) network. The authors of this paper combine techniques from two recently presented PoS Ethereum attacks: one where short-range reorganizations of the underlying consensus chain are used to increase individual validators’ profits and delay consensus decisions, and one where adversarial network delay is leveraged to stall consensus decisions indefinitely. This combined vector considerably relaxes the requirements on adversarial stake and network timing, and thus renders the attacks more severe. It allows an adversary with vanishingly small fraction of stake and no control over network message propagation to cause even long-range consensus chain reorganizations. Honest-but-rational or ideologically motivated validators could use this attack to increase their profits or stall the protocol, threatening incentive alignment and security of PoS Ethereum. The attack can also lead to destabilization of consensus from congestion in vote processing. [Read more]
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