Not just because of wintertime and crypto coins going down, but also because bad things keep happening in our industry. Before that, here's one positive sign.

Story One

x402 usage is taking off 

x402 is a protocol developed by Coinbase in partnership with Cloudflare to bring something to the internet that the internet desperately needs: a native way to transfer value. You might now be tempted to point out that crypto would fill that niche, but crypto payment systems just like the financial rails are designed with humans in mind. 

In an age where at least 50% of traffic is already bots, it's not future-proof to only think of us humans. Instead, x402 is explicitly designed with APIs, apps, and AI agents in mind, allowing them to pay instantly using USDC. The name is inspired by the HTTP 402 payment required code, introduced in 1997 to facilitate digital cash transfers, but remained unused due to high transaction fees. 

Things look different with x402 protocol, which could explain how usage of the protocol has exploded, growing 10,780% in one week in October, closing in on 500,000 payments. 

If you wonder how you might benefit from this, here's a showcase of an AI agent you can chat with, which will use x402 in the back to pay for API calls to the Nansen database to offer accurate onchain insights. 

Takeaway: Before everyone gets too excited about the dawn of autonomous agents that'll all make money, let's not forget, every agent created needs money from someone.

Story Two

Another one bites the dust 

Things aren't looking too good for journalism in general, and haven't since the big pivot towards ads as the main revenue source, and the inability of most media to sustain themselves based on subscriptions. Surely, the desire for entertainment rather than the pursuit of truth in audiences does its part in contributing to this downward spiral. 

Naturally, crypto, despite occasional projects aspiring to save journalists or the media, isn't spared the same dynamics. Ever since Bullish bought Coindesk, eroding its editorial freedom, crypto media as a whole has been somewhat disappointing. Last week, Blockworks announced that it'd be shutting down its news section to focus on something more profitable (the subtext I read). 

Instead of news, Blockworks will focus on its data and reporting business, selling institutions and individuals expensive plans to access actionable insights derived from on - and offchain data. 

While some considered the news devastating, others took it with more humour.

Takeaway: The original sin killing journalism has little to do with crypto; it's the very model of journalism as a public good that somehow has to remain commercially viable. Still, I had harbored some hope that we could reimagine, but turns out we can't. 

Story Three

Not just another hack 

Balancer, one of the longest-standing DeFi projects, has been exploited for roughly $120 million, once again highlighting that safety is just an illusion in DeFi land. For Balancer, it's the third attack this year, following a stablecoin exploit in August caused by a vulnerability in its liquidity pool contracts and a front-end attack that cost users $238,000 in September. 

While the hack does not rank under the top 3, it still has crypto Twitter wondering if we can ever trust anything. That's of course a very funny question to ask yourself in a supposedly "trust-less" space.

Despite numerous audits by reputable agencies, a vulnerability remained for the exploiter to bypass safeguards and begin transferring millions to their own account. Balancer's composable design amplified the flaw, by allowing the attacker to use the same entry point on pools on chains other than ethereum, furthering the damage. 

The full details are yet to be revealed, but one way or another, this is not great for crypto's ambitions of institutional adoption. 

Takeaway: Smart contracts aren't just not smart, they're also, as it appears, nearly impossible to code without bugs. 

Fact of the week: Since we're in the first week of a new month, you might have wondered why November includes the Latin word Novem, meaning nine, when it's the 11th month. It used to be the ninth month in the calendar, until January and February got added. Instead of changing it, people decided to keep the name. Btw, December is also not derived from the Latin word for twelve. The more you know 😉

Naomi for CoinJar

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