Welcome to The Protocol, CoinDesk’s weekly round-up of the most important stories in cryptocurrency technology development. I’m Margaux Nijkerk, a reporter for CoinDesk.
In this issue:
- Monad opens Airdrop portal ahead of token launch
- Ethereum’s Fusaka is deployed in Sepolia. Hoodi testnet is next
- Monero releases privacy enhancements for sneaky network nodes
- Ethereum Foundation expands privacy efforts with dedicated research cluster
network news
Once the portal opens, the MONAD airdrop approaches: Monad is gearing up for one of the most anticipated token launches of the year. The Layer 1 blockchain project opened the MON airdrop portal and invited eligible users to check the status ahead of the official token distribution. Although the airdrop itself has not yet started, Monad Foundation said that users will be able to verify their eligibility and connect their wallets, and that the period will be open until November 3, 2025. “There’s no incentive to rush to apply, so take your time. Triple-check everything,” Monad co-founder Kione Hong said on X. In a blog post, the Monad Foundation will reward approximately 5,500 core community members and 225,000 broader cryptocurrency users, users who have contributed to the growth of the Monad ecosystem. Distribution will be done through a multi-track system across five categories: Monad Community, Onchain Users, Crypto Community, Crypto Contributors & Curious, and Monad Builders. Those who qualify in multiple tracks can stack their quotas to give more weight to active participants. The team also said it will combine on-chain activity data (such as DEX volume and NFT ownership) with off-chain verification via platforms such as Twitter, Discord, and Telegram. This airdrop marks a step towards Monad’s upcoming mainnet launch, although details of when it will take place and how many tokens will be allocated to these communities are still unclear. — Margaux Nykerk read more.
FUSAKA goes live on Ethereum’s SEPOLIA testnet: Ethereum developers began a second test of the upcoming Fusaka upgrade on the Sepolia network earlier this week, taking another step towards the upgrade’s mainnet debut. This test follows a successful rollout on the Holesky testnet two weeks ago. The developers are planning a final rehearsal on the Hoodi network on October 28th, after which they will set a date to activate Fusaka on Ethereum’s main blockchain. Coming just months after Ethereum’s major Pectra upgrade, Fusaka is designed to reduce costs for institutions using the network. One of its key features, PeerDAS, allows validators to validate only a portion of the data rather than the entire “BLOB”. This improvement reduces bandwidth demands and helps reduce costs for both the Layer 2 network and validators. Testnets like Sepolia play an important role in Ethereum’s development cycle, providing developers with a reliable environment to test upgrades under real-world conditions before going live on the main network. — Margaux Nykerk read more.
MONERO releases privacy enhancements for sneaky network nodes: Leading privacy blockchain Monero has released an important upgrade that significantly increases user protection against spy nodes. Blockchain announces CLI v0.18.4.3 ‘Fluorium Fermi’ on X, calling it a highly recommended release that improves protection against spy nodes. Monero relies on a decentralized peer-to-peer (P2P) network where nodes (computers) connect directly to each other to share and verify transactions and blocks. Privacy is ensured by several key technologies. Each transaction uses a unique stealth address, which hides the recipient’s real address. Ring signatures confuse sender transactions with other decoy transactions, obscuring who actually sent the funds. and Ring Confidential Transactions (RingCT) hide the amount being transferred. Still, a paper published on the research sharing platform arXiv in September points to the growing presence of non-standard nodes in the network. Although these nodes pretend to be honest nodes, their purpose may be to monitor the network and monitor other nodes, putting your privacy at risk. The Fluorine Fermi update addresses this challenge by implementing an improved peer selection algorithm that reduces the chance of users connecting to multiple nodes in the same IP subnet, a common spying node tactic. Prevent suspicious IP addresses from connecting to large clusters and direct users to more secure nodes. — Omkar Godbole read more.
At EF, privacy is a core part of our work: The Ethereum Foundation has made privacy a formal pillar of its roadmap, expanding its research efforts to a dedicated cluster and now covering private payments, attestation, identity, and enterprise use cases. Since 2018, Ethereum has supported privacy research through its Privacy and Scaling Explorations (PSE) team through experiments such as semaphores for anonymous signaling, MACI for private voting, zkEmail and zkTLS, and the Anon Aadhaar project. These have become reference points for developers across the ecosystem, spawning hundreds of forks and integrations. A new “Privacy Cluster” coordinated by Igor Barinov brings these experiments together under a single umbrella alongside new initiatives, according to a blog post. These include private read and write for payments and interactions, portable proof of identity and asset ownership, the zkID system for selective disclosure, UX work to normalize privacy tools, and Kohaku, an SDK and wallet designed to use strong encryption by default. The Institutional Privacy Task Force is also part of the cluster and translates compliance and operational requirements into specifications that large companies can test. The Foundation argued that privacy is essential to Ethereum’s reliability. Blockchains are transparent by design, but for widespread adoption users and institutions must have the option to transact, manage, and build on them without exposing sensitive data. – Shaurya Marwa read more.
In other news
- Cryptocurrency exchange Backpack has announced the addition of SEC-registered US stocks to its trading platform with Superstate, a blockchain finance startup led by Compound founder Robert Leshner. The deal brings Superstate’s Opening Bell platform into Backpack, allowing users outside the US to trade tokenized shares of publicly traded companies on-chain. In addition to this, Backpack claimed the bragging rights of being the first centralized crypto exchange to list issuer-backed SEC-registered stocks natively on-chain. Supported stocks and rollout dates will be announced in the coming weeks, the companies said. The companies say these products are not synthetic or wrapped derivative products, but real stocks issued under U.S. securities laws with the same CUSIP identifier as traditional products on the Nasdaq and the New York Stock Exchange. “For traders, this means more assets can be bought, sold and used as collateral, creating more margin opportunities than in traditional markets,” Robert Leshner said in a statement. “For issuers, it expands their reach to millions of crypto-native investors and connects them directly to modern capital markets infrastructure.” — christian sander read more.
- BlackRock (BLK), the asset management giant with over $13 trillion in assets under management, is ramping up its efforts to bring traditional finance (TradiFi) on-chain, seeking a greater role in tokenization as a way to unlock market access and streamline the way assets are traded. CEO Larry Fink said in a post-earnings conference call that teams across the company are exploring ways to use tokenization to make markets more efficient and accessible, and leadership is hinting at bigger moves ahead. “I believe there will be some exciting announcements in the coming years about how we can play a bigger role in this whole idea of tokenizing and digitizing assets,” Fink said. Fink said he expects digital assets – a market currently worth more than $4.5 trillion – to grow “significantly” over the next few years. — Helen Brown & Christian Sander read more.
regulation and policy
- U.S. authorities have indicted and sanctioned the Prince Group, a global company accused of operating a global forced labor fraud operation that included a notorious Cambodian-based pig slaughter scheme. Prince Group founder and chairman Cheng Zhi, a British-Cambodian national, was indicted in New York on Tuesday on charges of conspiracy to commit money laundering and commission wire fraud, according to the Department of Justice. In this case, the Department of Justice announced that it was the largest cryptocurrency seizure in history, with 127,271 Bitcoins worth approximately $14.4 billion in today’s terms. “Today’s action represents one of the most significant attacks yet on the global scourge of human trafficking and cyber-enabled financial fraud,” U.S. Attorney General Pamela Bondi said in a statement. And in a concerted effort, the U.S. Treasury announced that it had designated the Prince Group as a transnational criminal organization and imposed sanctions that cut off its financial activities and people’s ability to transact without U.S. influence. — jesse hamilton read more.
- Russia is moving closer to formally integrating cryptocurrencies into its financial system, as authorities allow the widespread use of cryptocurrencies and the central bank prepares to allow banks to handle digital assets under strict controls. Deputy Finance Minister Ivan Chebeskov said that around 20 million Russians are currently using cryptocurrencies “for various purposes,” a reality that the government must deal with rather than resist, TASS reported. Chebeskov argued that domestic infrastructure needs to be developed to protect users and ensure the country’s “economic and technological interests,” TASS reported. The scale of the rollout was highlighted by new figures cited by TASS from the Bank of Russia. According to the news agency, the balance of Russian citizens’ cryptocurrency exchange wallets totaled 827 billion rubles (approximately $10.15 billion) as of the end of March 2025, an increase of 27% from the same period last year. — Shiamak Mathnavi read more.
calendar
- October 16-17: European Blockchain Convention, Barcelona
- November 17-22: Devconnect, Buenos Aires
- December 11-13: Solana Breakpoint, Abu Dhabi
- February 10-12, 2026: Consensus, Hong Kong
- February 17-21, 2026: East Denver, Denver
- March 30th – April 2nd: EthCC, Cannes
- May 5-7, 2026: Consensus, Miami
