Hillstone Finance Weekly Update (Apr 24~ 28)

Hillstone Finance
4 min readApr 28, 2023

Welcome to the weekly update from Hillstone Finance. We have brought one news for this week:

  1. Duk-hyun Hong participated in the NBN news

NBN News (Apr 27)

Q1. What is the difference in trends between the traditional financial market and the cryptocurrency market?

A1. Traditional financial markets and cryptocurrency markets show a clear trend because they are not perfectly correlated.

The cryptocurrency market is still more volatile, and the movement may vary depending on factors such as investors’ risk preferences and regulations.

The phrase “Sell in May and leave” is used to predict an annual weakness in traditional markets, which could lead to selling pressure and falling stock prices.

However, it remains to be seen whether these trends will directly affect the cryptocurrency market with unique characteristics.

The decline in the cryptocurrency market is believed to be affected by a number of factors.

Q2. What is the market entry strategy of investors in the current section?

A2. A continued rally in the cryptocurrency market may require a period of accumulation and consolidation so that market participants can recognize long-term value and consider investment opportunities.

These steps help build a stable upward trend without overheating.

If the cryptocurrency market experiences a lull, the next rally could be stronger.

During this period, investors can evaluate factors such as technological advances, new projects, and improved regulations to rebalance their investment strategies and build a stronger foundation for stable growth as the market recovers.

Q3. Recently, meme coin craze and MEV sandwich attacks have been frequent…What about this phenomenon?

A3. Maximum Extractable Value (MEV) refers to the amount of profit that a miner or attacker can extract through transaction manipulation on a blockchain.

MEV sandwich attacks have become more common in Ethereum networks, especially with the popularity of meme coins.

Cancun-Deneb And Ethereum Shapel Upgrades can Address MEV Issues.

Q4. What is a sandwich trading technique and how does it make a profit?

A4. Sandwich trading is a method that an attacker uses to make a profit by inserting his or her transaction before or after a particular transaction.

They pay high gas costs to prioritize transactions, so they can respond quickly to market price changes and benefit from them.

Q5. MEV Trading Bot Ethereum Network Fee Too Much…What would be the impact on Ethereum’s network if it continued?

A5. MEV trading bots pay high fees on the Ethereum network, which can increase gas fees for end users and degrade network performance.

This could negatively affect the healthy development of the cryptocurrency market and reduce the reliability of the Ethereum network.

Q6. How can I reduce or prevent MEV sandwich attacks?

A6. Protocol upgrades such as Ethereum 2.0, which improve network security and efficiency to reduce or prevent MEV sandwich attacks, and solutions such as Layer 2, can improve transaction processing.

MEV attacks due to liquidity problems in meme coins could have a negative impact on the entire cryptocurrency market by increasing gas rates and reducing market efficiency and stability.

Technical improvements are needed to address this issue, and the Ethereum Foundation is preparing for the Cancun-Deneb upgrade at the end of 2023.

Q7. What is Cancun-Deneb Upgrade?

A7. The Cancun-Deneb upgrade, scheduled for the end of 2023, aims to improve Ethereum’s scalability and lower network costs.

A significant rise in Ethereum prices could delay upgrades, raising anxiety among investors.

A key element of the upgrade is the EIP-4844 “Proto Darksharding”, which updates the execution and consensus layers to achieve the goal.

The upgrade is expected to further lower fees for Layer 2 solutions such as Optimism and Arbitrum.

Q8. What future roadmap is Ethereum drawing?

A8. Ethereum’s roadmap focuses on scalability, security, sustainability, and user experience, and the Cancun-Deneb upgrade will improve the layer of execution and consensus to achieve these goals.

The upgrade is expected to lower Layer 2 fees and contribute to the growth of the Ethereum ecosystem.

EIP (Ethereum Improvement Proposals) is a plan created by the community to improve Ethereum.

EIP-1 provides guidance on EIP generation, and EIP covers a variety of topics, such as dank sharding systems, which simplify transaction processing by verifiers.

Q9. What is dank shading technology?

A9. Sharding is a technology that divides a blockchain network into smaller groups called shards, which can process transactions independently and increase scalability.

Proto-Dank Sharding is an attempt to improve the scalability of Ethereum by allowing only certain parts of the blockchain to process certain transactions.

This upgrade aims to solve the MEV problem caused by centralization and reduce fees.

Q10. What is the solution to the MEV problem through dank shading technology?

A10. Dank sharding is a proposed technology aimed at addressing the centralization and MEV issues of L1 blockchains such as Ethereum and improving existing sharding technologies.

We alleviate the problem by solving the MEV problem by dividing block generation into two roles: builder and proposer.

It also improves the simplification of roll-up design by creating blocks and execution blocks at the same time.

Dank Sharding aims to improve the stability and scalability of the Ethereum network, ultimately providing low gas rates.

That is all for this weekly update.

Thank you.

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https://twitter.com/hillstoneFin

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