The Weekly Wrap: Eurozone inflation, Ropsten’s beacon chain, Russia considers crypto for international payments

Jun 3, 2022

The most important thing is to get something launched. It almost doesn’t matter how one designs it.

Do Kwon on launching Terra 2 that later caused oracle errors impacting funds on Anchor and Mirror (via Twitter)


1. New Eurozone inflation record high of 8.1% in May

The Facts:

  • Eurozone inflation hits another record high of 8.1% for the month of May, up 0.7% from April’s record high and 0.3% above estimates.
  • Rising inflation, especially energy-driven by the war in Ukraine with 39.2% compared to 37.5% in April, is having a significant impact.
  • Germany and France have seen annualized inflation of 8.7% and 5.8%, respectively, and Spain with 8.5% surprised with higher than estimated inflation prints.

Why it’s important:

  • The concerning numbers come 10 days before a crucial ECB meeting where large-scale asset purchases will be announced and plans to raise interest rates in July for the first time in more than a decade are expected.
  • According to Governing Council member Robert Holzmann, the recent inflation numbers strengthen the case for the ECB to lift interest rates by a half-point in July to avoid tougher steps later.
  • While the inflation numbers come along with record highs in the ECB balance sheet, Holger Zschäpitz also points out a deviation between inflation and the ECB's interest rate that remains pegged at 0%.
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(Source: SDW, Eurostat, Bitcoin Suisse Research)
2. Launch of Ropsten’s beacon chain

The Facts:

  • On May 30, Ethereum’s oldest testnet, Ropsten, successfully launched its beacon chain in preparation for the testnet merge.
  • The merge with Ropsten’s beacon chain is expected to happen on June 8, after the beacon chain upgrades (Bellatrix) to compatible protocol rules on June 2.
  • After Bellatrix, a Terminal Total Difficulty (TTD) will be set to activate the transition on the PoW chain.
  • Prior to the mainnet merge, Goerli and Sepolia testnets will run through the merge as well before the focus shifts to mainnet.

Why it’s important:

  • The PoS transition of Ethereum is one of the most anticipated updates in crypto history and with the Ropsten merge, it is inching closer than ever before.
  • Ropsten will be the first important and oldest PoW testnet to fully transition from PoW to PoS, being the last significant milestone before the Ethereum mainnet switches to PoS.
  • Before entering the final testing stage of testnet deployments, various client implementations on Kintsugi, Kiln, and shadow forks were validated successfully.
  • As the merge upgrade comes with novelties regarding node operators and upgrade phases, Ropsten will upgrade earlier than previously to give the community more time for preparation.
  • If there are no issues present with the Ropsten, Goerli, and Sepolia merge, a slot height will be chosen for the Bellatrix upgrade on the beacon chain, and a TTD will be set for the mainnet transition and clients will launch releases that enable the merge.

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(Source: Token Terminal, Bitcoin Suisse Research)

$556.8m

Total fees paid by users of Ethereum within the last 30 days


3. Russia considers allowing crypto to facilitate international payments

The Facts:

  • Interfax reports that Russia is considering allowing cryptocurrencies for international payments.
  • Speaking at a forum organized by the ruling United Russia party, Ivan Chebeskov, director of the ministry’s Financial Policy Department, also stated that if cryptocurrency is recognized as property, it would enable utilization in barter deals with foreign partners. 

Why it’s important:

  • While the central bank of Russia is embracing crypto for international payments, it still believes that crypto within Russia’s financial infrastructure might create great risks for citizens and users.
  • As Russia is dealing with western sanctions that have significantly restricted its access to global financial markets due to the war in Ukraine, they are seeking more independence from the U.S. dollar in international payments.
  • Cryptocurrencies might offer a viable alternative to the current limitations imposed by the conventional financial system.
In other news
  • Lightning Network capacity hits new ATH of 3’900 BTC (via Cointelegraph)
  • SpaceX soon to accept DOGE for merch (via Fortune)
  • Dune Engine V2 launches (via Dune)
  • Argentines turn to crypto amid inflation (via Cointelegraph)
  • Optimism airdrop went live for 249k eligible wallets (via Decrypt)

Bitcoin Suisse