Bitcoins
Bitcoins Ethereum’s Glamsterdam, Bitcoin and quantum computing, and new Eigenlayer governance proposal
Dec 24, 2025, 2:46 p.m.
What to know:
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.
In this issue:
- Most important tokenholder rights debate’: Aave faces identity crisis
- Ethereum’s ‘Glamsterdam’ upgrade aims to fix MEV fairness
- Bitcoin isn’t under quantum threat yet, but upgrade could take 5-10 years
- Foundation behind restaking protocol EigenLayer plans bigger rewards for active users
Network News
AAVE COMMUNITY SPLIT: Aave’s community members and participants have become sharply divided in recent weeks over control of the protocol’s brand and related assets, intensifying an ongoing dispute over the relationship between the decentralized autonomous organization (DAO) and Aave Labs, the centralized developer firm that builds much of Aave’s technology. The debate has drawn outsized attention because it cuts to a central question facing many of crypto’s largest protocols: the tension between decentralized governance and the centralized teams that often drive execution. As protocols scale and brands accrue value, questions around who ultimately controls those assets, token holders or builders, are becoming harder to ignore. The dispute was triggered by Aave’s integration of CoW Swap, a trade execution tool, which resulted in swap fees flowing to Aave Labs rather than the DAO treasury. While Labs argued the revenue reflected interface-level development work, critics said the arrangement exposed a deeper issue: who ultimately controls the Aave brand, which has over $33 billion in locked into its network. That question has now become central to the debate over ownership of Aave’s trademarks, domains, social accounts and other branded assets. Supporters of DAO control argue the proposal would align governance rights with those who bear economic risk, limit unilateral control by a private company, and ensure the Aave brand reflects a protocol governed and funded by token holders rather than a single builder. Those who support the Lab having that position counter that taking brand control away from the builders could slow development, complicate partnerships and blur accountability for running and promoting the protocol. The proposal has deeply divided community members, with opponents and supporters offering starkly different visions for the future of Aave. — Margaux Nijkerk & Shaurya Malwa Read more.
ETHEREUM’S GLAMSTERDAM PREPPING: Ethereum developers, fresh off last month’s successful Fusaka upgrade, which cut down costs for nodes, are already moving full-steam ahead on planning the blockchain’s next major change. Enter “Glamsterdam.” The name is a portmanteau of two simultaneous upgrades taking place on Ethereum’s two core layers. The execution layer, where transaction rules and smart contracts live, will undergo the Amsterdam upgrade, while the consensus layer, which coordinates validators and finalizes blocks, will see an upgrade known as Gloas. At the heart of Glamsterdam is enshrined Proposer-Builder Separation (ePBS), formally tracked as EIP-7732. The proposal would bake into Ethereum’s core protocol a rule that separates nodes who build blocks from those who propose them, preventing any single actor from controlling which transactions are included or how they are ordered. Today, this separation largely relies on off-chain services known as relays, which introduces trust assumptions and centralization risks. Under ePBS, block builders would assemble blocks and cryptographically seal their contents, while proposers would simply choose the highest-paying block without being able to see or tamper with what’s inside. The transactions would only be revealed after the block is finalized, reducing opportunities for manipulation and abuse related to MEV, or maximal extractable value — the extra profit validators or builders can make by reordering, inserting or censoring transactions. — Margaux Nijkerk Read more.
BITCOIN AND QUANTUM COMPUTING: Some Bitcoin developers are no longer arguing about whether quantum computing will break the network, but letting onlookers know how long it would take to prepare if it ever did. That shift was crystallized this week by longtime Bitcoin developer Jameson Lopp, who said that while quantum computers are unlikely to threaten Bitcoin anytime soon, any meaningful defensive changes could take much longer than many assume. “No, quantum computers won’t break Bitcoin in the near future,” Lopp posted. “We’ll keep observing their evolution. Yet, making thoughtful changes to the protocol (and an unprecedented migration of funds) could easily take 5 to 10 years.” The discussion matters because Bitcoin’s value increasingly depends on long-term confidence. As more institutional capital treats bitcoin as a multi-year holding, even distant technical risks can influence allocation decisions and shape how markets price uncertainty, as CoinDesk reported on Saturday. — Shaurya Malwa Read more.
EIGENLAYER GOVERNANCE PROPOSAL: The foundation behind restaking protocol EigenLayer has proposed a governance change to introduce new incentives for the EIGEN token, focusing on productive network activity and fee generation. Under the plan outlined in a recent blog post, a cornerstone of the proposal is the introduction of a fee model that channels revenue from Actively Validated Services (AVS) rewards and EigenCloud services back to EIGEN holders. AVSs’ are blockchain-based services that use EigenLayer’s security, relying on staked tokens and operators to keep it running honestly and correctly. The team argues this change will strengthen long-term value accrual for EIGEN token holders and better align token economics with real usage of EigenLayer’s network. “This approach aligns incentives across the ecosystem: Stakers and Operators backing active services earn more, AVSs get the capital they need, and EIGEN benefits from improved tokenomics,” according to the blog post. – Margaux Nijkerk Read more.
In Other News
- Upexi (UPXI), a Nasdaq-listed crypto treasury firm focused on solana, filed to raise as much as $1 billion in a shelf registration with the U.S. Securities and Exchange Commission (SEC). The move gives the company the flexibility to raise capital by selling common stock, preferred shares, debt instruments, warrants or units in one or more offerings over time. Based in Tampa, Florida, Upexi manages a number of consumer brands including Cure Mushrooms medicinal products and Lucky Tail pet care. It also manages the fourth-largest SOL treasury of any public company, with more than 2 million tokens ($248 million) on its balance sheet. — Francesco Rodrigues Read more.
- The International Monetary Fund (IMF) praised El Salvador’s stronger-than-expected economic growth in a statement. The update notably did not include previous IMF suggestions that El Salvador would be putting on hold its strategy of accumulating bitcoin, something that country — under the leadership of President Nayib Bukele — has continued to do since negotiating an IMF loan package several months ago. Diverting from its normal strategy of adding on bitcoin per day, El Salvador in November added more than 1,000 BTC to its national treasury strategy amid that month’s steep selloff. The government has now accumulated nearly 7,500 BTC worth about $660 million at current prices. The IMF did note that negotiations for the sale of the government’s crypto wallet Chivo are “well advanced. “Discussions with regards to the Bitcoin project continue, centered on enhancing transparency, safeguarding public resources, and mitigating risks,” the agency added. — Olivier Acuna Read more.
Regulatory & Policy
- Russia’s central bank laid out a proposed framework that would legalize and regulate cryptocurrency trading for both individuals and institutions, continuing its softening stance toward cryptocurrencies. However, it continues to caution that investing in crypto carries risks, including potential losses. “They are not issued or guaranteed by any jurisdiction and are subject to increased volatility and sanctions risks,” the central bank’s press release said. “When deciding to invest in crypto assets, investors should understand that they assume the risk of potential loss of their funds.” The central bank also said that “digital currencies and stablecoins are recognized as monetary assets; they can be bought and sold, but they cannot be used for domestic payments.” — Olivier Acuna Read more.
- The Council of the European Union, an EU body that amends legislation and commits national governments to adopting the bloc’s laws, said it backs the European Central Bank’s plan to explore an official digital currency, calling it an evolution of money and a tool for financial inclusion. In a post on its website, the Council, however, said the ECB will need to set limits on the total value that can be held in online accounts and digital wallets at any one time to “avoid the digital euro being used as a store of value” to prevent it from having any impact on financial stability. “The holding limits are not just about abstract financial stability,” Edwin Mata, co-founder and CEO of tokenization platform Bricken, told CoinDesk. “They are about preventing the digital euro from competing directly with bank deposits. If people could hold unlimited digital euros, deposits could shift instantly from commercial banks to the ECB, especially during periods of stress, effectively accelerating bank runs.” — Olivier Acuna Read more.
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