Also: EF’s Stańczak to leave ED role, XRPL member-only DEX and Ethereum revives the DAO
Welcome to The Protocol, CoinDesk's weekly wrap of the most important stories in cryptocurrency tech development. I’m Margaux Nijkerk, a reporter at CoinDesk.Ethereum Foundation leadership shake-up: Tomasz Stańczak out as co-executive director: On-chain social platform and decentralized protocol Zora is making a decisive shift beyond its non-fungible tokens and creator roots with the launch of “attention markets” on Solana, a product that allows users to trade tokens tied to internet trends, memes and cultural moments.
The feature, unveiled Feb. 17, lets anyone create a new market for 1 SOL. Once live, users can buy and sell positions on whether a topic will gain or lose traction across social media. Instead of wagering on elections or macro data, traders speculate on buzz itself — such as hashtags, viral narratives, even broad themes like “AI girlfriend” or “bitcoin.” The design leans heavily into Solana’s strengths. Fast block times and low transaction costs make it easier to support rapid price updates and frequent trading, which are essential for markets built around fleeting online momentum. Initial activity was limited, however. The primary “attentionmarkets” token briefly touched roughly $70,000 in market capitalization, with around $200,000 in trading volume. Most other trend markets struggled to attract meaningful liquidity, with few crossing the $10,000 mark on their first day. Percentage swings were sharp, though largely driven by thin order books rather than sustained demand. Zora was among the breakout applications on Coinbase's Layer 2 Base network in the past few years. It launched its ZORA token there in April and helped roll out Creator Coins tied to Base profiles in July, a push that briefly helped Base overtake Solana in daily token creation. Creator coins are tokens tied to an individual creator’s online profile, brand or community. Think of them as tradable “shares” in a person’s internet presence. On platforms like Zora and Base, a creator coin could be automatically generated from a user’s profile. Fans could buy the coin to signal support, gain social clout, or speculate that the creator’s popularity would grow. As more people bought in, the price could rise, and interest faded, it could fall. As such, some in the Base community saw the new “attention markets” product as a pivot away from that momentum. —: Tomasz Stańczak, co-executive director of the Ethereum Foundation , announced he will step down from his leadership role at the end of February 2026, marking a notable shift in the organization’s executive team. Stańczak, who has co-led the foundation alongside Hsiao-Wei Wang since early 2025,believes the foundation and the broader Ethereum ecosystem are “in a healthy state” as he prepares to hand over the reins to Bastian Aue, who will take the co-executive director role alongside Wang. Stańczak’s tenure began at a turbulent time for the EF. He wasexecutive director Aya Miyaguchi into a new leadership position amid mounting community criticism that the foundation wasn’t doing enough to aggressively push the Ethereum ecosystem forward. At the time, detractors pointed to a perceived disconnect between the EF and developers,interest, clashes over strategic direction and frustrations about ETH’s price performance. Such criticisms helped spur a broader leadership restructuring. While Stańczak stressed his confidence in the team’s ability to carry forward the EF’s mission, he also signaled his intention to remain involved in the ecosystem. —a new “Permissioned DEX” amendment, a technical upgrade designed to let regulated institutions trade on XRPL without opening markets to everyone. The change, known as XLS-81, allows the creation of permissioned decentralized exchanges that work like XRPL’s existing built-in DEX, but with a key difference. A permissioned domain can restrict who can place offers and who can accept them, creating a gated trading venue where participation is tied to compliance requirements such as KYC and AML checks. Think of it as a 'members only' marketplace, while still keeping the trading mechanics native to the ledger. The feature is aimed at banks, brokers and other firms that may want onchain settlement and liquidity but cannot interact with fully open DeFi markets. For these players, the ability to control access is not optional; it is a minimum requirement. The activation also adds to a growing set of “institutional DeFi” primitives XRPL has been rolling out this month. Token Escrow, or XLS-85, went live last week, extending XRPL’s native escrow system beyond XRP to all trustline-based tokens and Multi-Purpose Tokens, including stablecoins such as RLUSD and tokenized real-world assets. —In the summer of 2016, the Decentralized Autonomous Organization, known as the DAO, became the defining crisis of Ethereum’s early years. A smart c from that initial project, and the community’s response — a contentious hard fork to recover those funds, splintered the original chain from the current one, leaving the old chain behind, known as Ethereum Classic. The DAO was once the greatest crowdfunding effort in crypto’s history, but faded into a cautionary tale of governance, security, and the limits of “code is law.” Now, nearly a decade later,. What was lost, or rather, left untouched, is being repurposed as a ~$150 million security endowment for the Ethereum ecosystem. The endowment, now known as TheDAO Security Fund, will stake some of the 75,000 dormant ether and deploy the yield through community-driven funding rounds to support Ethereum security research, tooling and rapid-response efforts, while keeping claims open for any remaining eligible token holders. At the center of this story is Griff Green, one of the original DAO curators and a veteran of Ethereum decentralized governance. “When the DAO hack happened , obviously, I jumped into action and basically led everything but the hard fork,” Green said of assembling the white hat group that rescued funds on the original Ethereum chain. “We hacked all these hackers. It was straight up DAO wars”. That effort, alongside others, helped salvage funds that might otherwise have been lost forever. At the time, the hard fork restored roughly 97% of the DAO’s funds to token holders, but left a small fraction, roughly 3%, in limbo. These “edge case” funds came from quirks of the original smart contracts: people who paid more than expected, those who burned tokens to form sub-DAOs, and other anomalies that didn’t cleanly map back. Over time, that leftover balance, once only worth a few million, ballooned into something far more significant due to ether’s appreciation. “The value of the funds we control has grown dramatically… well over 75,000 ETH,”A recent poll of 1,000 American investors in digital assets found that over half are scared they'll face an IRS tax penalty this year as new transparency rules governing crypto exchanges take effect. The data collected at the end of January by crypto tax platform Awaken Tax canvassed U.S. holders’ concerns about a radical shift from self-disclosure to automatic reporting of transactions. This has been enacted through the introduction of the “Digital Asset Proceeds From Broker Transactions,” or, which tens of millions of Americans will be made aware of over the next month or so. The new rules are designed to clamp down on crypto tax evasion and compel brokers, such as crypto exchange Coinbase , to report all sales and exchanges of digital assets that occurred in 2025 to the tax agency. The aim is to give tax authorities a clear view of investor gains and losses by opening up customer data inside exchanges for the first time, allowing the IRS to compare what crypto brokers report with what taxpayers file. While the goal is to remove any margin of error, the rules are a “blunt instrument,” created by legislators who know nothing about crypto, according to Awaken Tax founder Andrew Duca. “It means crypto is being treated like stocks, but it doesn’t behave in that way. Real crypto users will move assets between multiple wallets and interact with decentralized finance protocols, using pretty complex trading strategies,” Duca said. — Crypto venture firm Dragonfly Capital completed a $650 million fourth fund, marking one of the largest raises in the sector at a time when many blockchain-focused VCs are struggling, Managing Partner Haseeb Qureshi said. “It’s a weird time to celebrate,” Qureshi wrote on a, describing low spirits and “the gloom of a bear market” for crypto. However, he noted that Dragonfly has historically raised capital during downturns, including the 2018 ICO crash and just before the 2022 Terra collapse, 'vintages,' he said, ultimately became the firm’s best performers. In September, the firm said itfor its fourth fund, targeting early-stage projects. It has not yet identified any of them. In May 2023, Dragonfly CapitalHyperliquid , a blockchain-based exchange that processed more than $250 billion in perpetual futures trading last month, has launched a U.S. lobbying and research arm to shape how lawmakers regulate decentralized finance . The, a Washington, D.C.-based nonprofit, will focus on regulatory frameworks for decentralized exchanges, perpetual futures and blockchain-based market infrastructure, according to a. Jake Chervinsky, a prominent crypto lawyer and former policy head at the Blockchain Association, will serve as founder and CEO. The launch comes as Congress and federal agencies debate how to oversee crypto trading platforms and derivatives markets. Perpetual futures, which allow traders to hold leveraged positions without an expiration date, are widely used on offshore venues but remain a gray area under U.S. law. The arrival of a new group also represents just the latest entrant into a Washington crypto-policy scene that's jammed with similar organizations, including the DeFi Education Fund and Solana Policy Institute, in addition to the broader groups such as the Digital Chamber, Blockchain Association and Crypto Council for Innovation. And the new organization lands as negotiation is well underway on Senate legislation that may set U.S. DeFi policy. — The legal challenges from state governments against certain aspects of prediction markets such as Polymarket and Kalshi received a sharp rebuke from U.S. Commodity Futures Trading Commission Chairman Mike Selig, who is arguing that his federal agency has jurisdiction, not the states. "To those who seek to challenge our authority in this space, let me be clear: we will see you in court," Selig said into back up the federal role as the leading regulator over this corner of the derivatives markets. "The CFTC has regulated these markets for over two decades," he said. "They provide useful functions for society by allowing everyday Americans to hedge commercial risks like increases in temperature and energy price spikes; they also serve as an important check on our news media and our information streams." — Ten years after the famous hack, the DAO Security Fund has decided to stake the untouched ETH and use the yield to fund Ethereum security initiatives, honor claims indefinitely, and professionalize governance and key management.In the summer of 2016, the Decentralized Autonomous Organization, known as the DAO, became the defining crisis of Ethereum’s early years. Now, nearly a decade later, that story has taken an unexpected turn. What was lost, or rather, left untouched, is being repurposed as a ~$150 million security endowment for the Ethereum ecosystem. The fund will distribute capital through decentralized mechanisms such as quadratic funding, retroactive public goods funding, and ranked-choice voting for proposals.1 hour ago
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