Hedera to Conduct Testnet Upgrade on December 8th

ZKsync announced Sunday that it plans to deprecate ZKsync Lite, the original zero-knowledge rollup it launched on Ethereum in 2020, at some point next year.

"This is a planned, orderly sunset for a system that has served its purpose and does not affect any other ZKsync systems," ZKsync said in a post on X. The team said it would share concrete details, dates, and migration guidance in the coming year.

ZKsync Lite, originally called ZKsync 1.0, went live in June 2020 as a payments-focused Ethereum Layer 2 scaling solution. The network supported token transfers, atomic swaps, and NFT minting, but lacked smart contract functionality, a limitation that constrained its utility compared to later rollup designs.

The protocol served as a proving ground for zero-knowledge technology on Ethereum. "ZKsync Lite was a ground breaking proof-of-concept and validated critical ideas related to building production ZK systems," ZKsync said. "It did its job: prove what's possible and pave the way for the next generation."

According to L2BEAT data, approximately $50 million in user funds remain bridged to ZKsync Lite, though the network now processes fewer than 200 daily operations. "Funds remain safe, and withdrawals to L1 will keep working through the process," ZKsync said. 

Matter Labs, the company behind ZKsync, halted active development on ZKsync Lite in March 2023 when it launched ZKsync Era, a full-featured zkEVM capable of running arbitrary smart contracts. The Block reported at the time that Era represented the "Holy Grail of scaling Ethereum" by enabling developers to port existing applications without sacrificing security.

ZKsync emphasized that the deprecation does not affect its other products. "The next steps belong to systems built with the ZK Stack, Prividiums, and the broader ZKsync network," the team said, referencing its modular blockchain framework and enterprise-focused privacy chains.

The announcement comes as ZKsync navigates a challenging period. The network recently sunset its Ignite liquidity rewards program citing bearish market conditions, and the Aave DAO is considering deprecating its deployment on ZKsync Era due to low revenue generation.

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A fierce debate is unfolding at the heart of Bitcoin’s intellectual core as industry veterans clash over the future of custody, sovereignty, and the role of ETFs in driving mainstream adoption.

The latest spark came from investor Fred Krueger, who endorsed Nick Szabo’s call for a dual strategy.

ETFs Enter the Crossfire in Bitcoin’s Growing Self-Custody Debate

Krueger urges followers to adopt institutional rails, such as banks and ETFs, while fiercely protecting the right to self-custody.

His stance aims to bridge the widening divide between Bitcoin purists, who prize personal sovereignty, and ETF defenders, who argue that scale requires traditional infrastructure.

The discussion dates back to November 30, after Bram Kanstein argued that gold is so effective at serving as money that it has been replaced by paper notes created from nothing.

Szabo responded with a historical explanation: gold’s centralization in vaults and its poor resistance to theft made trust-based alternatives more practical for merchants and banks.

That centralization eventually led to gold being partially replaced by bills of exchange and telegraphic wire transfers.

Szabo stressed that Bitcoin solves key weaknesses around speed and verification, but still lags in one critical dimension: theft resistance.

This contributes to Wall Street’s preference for third-party custody.

ETFs vs. Self-Custody: A Philosophical Standoff

That context fueled a wider ideological rift. Bloomberg’s Eric Balchunas questioned why “snobby OGs” accept exchanges holding Bitcoin but oppose ETFs. Balchunas argues that both rely on outsourced custody and that ETFs are “waaay cheaper and safer.”

Analyst Sam Wouters countered sharply, noting that users can withdraw to self-custody from an exchange at any time, unlike with an ETF.

He argued that the value of self-custody lies in the option to exit, even if many users do not exercise it today. With ETFs, he warned, that option disappears.

However, Balchunas maintained that ETFs accelerate adoption, spread ownership across millions, and help Bitcoin mature into a less volatile asset.

Still, some push back that OGs do not accept coins being locked up under the control of corporations just because it increases the number. They also argue that ETFs risk giving institutions perceived influence over Bitcoin’s protocol direction.

As the debate escalated, Balchunas claimed self-custody is “a pain” and “very expensive” when bought through exchanges. However, left-wingers hold that many platforms offer free withdrawals, low spreads, and no annual fees, unlike ETFs.

Balchunas insisted ETF issuers “don’t want power of protocol,” despite general sentiment that corporations can always be pressured.

Still some hold that Bitcoin exists because investors cannot trust corporations on their word.

With Bitcoin’s identity continually being tested between sovereignty and scalability, the ETF–self-custody debate has transcended into more than a disagreement. It is now a defining fault line for the asset’s next chapter.

Growing US deregulation in crypto assets could potentially lead to financial instability, according to French President Emmanuel Macron. 

He says that there is "growing US deregulation in crypto assets and stablecoins."

If the U.S. lets crypto grow too freely, it could create risks that spill over globally since stablecoins often rely on USD assets.

Stablecoins are tightly tied to fiat reserves, settlement rails, and cross-border flows. If poorly regulated, they can potentially cause contagion across global markets.

Monetary sovereignty 

Macron wants Europe to stay protected and “sovereign” in monetary terms, arguing that the EU should not follow the U.S. toward deregulation.

This aligns with the EU’s MiCA regulation, which is much stricter than anything the U.S. has.

The French leader also wants the European Central Bank (ECB) to overhaul its monetary policy to adapt to new financial risks.

It is not common for a eurozone political leader to publicly urge a central bank to change its monetary policy framework, which is why this is rather notable. 

The stablecoin risk 

The global stablecoin market recently surged by nearly 50% and crossed $300 billion. That rapid growth could make stablecoins “systemically relevant,” senior official of the ECB Olaf Sleijpen. A run on U.S.-dollar–pegged stablecoins could force the ECB to change interest rates. 

Most of the global stablecoin supply remains backed by U.S. dollar-denominated reserves, which makes Europe vulnerable. 

Europe could end up subordinated to U.S. monetary conditions (even if the ECB wants different policies).