Happy holidays from the frozen north of Idaho! This is Colton from Hedgehog, your gateway to the ever-evolving landscape of digital assets and an easy way to replicate the performance of the crypto sector for your portfolio. As the year winds down, the crypto world continues to surprise and challenge us in new ways:

The Ledgercracker

Last week Ledger and several dapps were hacked, resulting in at least $150k of stolen user funds. While this isn’t technically a fault of the hardware, it's a stark reminder that in the world of crypto, security can never be taken for granted.

To be sure, it should be common practice that wallet makers should be willing to post collateral to a smart contract, where if any of the manufactured private keys can be revealed which corresponds to a public key posted in a manufacturer registry, the cracker should be able to claim the collateral as a bug bounty. Such schemes would be helpful for giving consumers confidence that each device is strong enough to resist an attack that would cost the size of the bug bounty.

Friends of the family may be working on such a scheme...👀

In Excelsis SOL

On a more uplifting note, SOL's trading volume is reportedly outpacing ETH. Ya love to see a titan of the industry getting surpassed by a young upstart, and we can’t help but enjoy the dynamic and sometimes unpredictable nature of market preferences and technological advancements in the crypto arena.

But what if we look closer? Turns out that a lot of ETH volume has migrated to layer 2 solutions like Polygon, Arbitrum, Optimism, and others, and if you add up these volumes, SOL is not even close. Still it makes a good narrative, and there will likely come a day where SOL L2s have just as much sway as those of ETH.

Prometheum’s ship came sailing in

Prometheum's emergence as a Special Purpose Broker Dealer marks a significant stride towards regulatory compliance in crypto. While everyone thought these guys were an SEC psyop to defang Coinbase’s criticisms that the SEC had not provided anyone a path to broker-dealer registration, I can tell you after talking to them that they’re real players.

While their registration is limited to the universe of registered digital asset securities, which is to say, only those that registered a regulation CF, A+, Title 3, or D offering, this evolution could pave the way for more mainstream acceptance and integration of crypto assets into traditional financial systems.

Angels we have heard on high

Lastly, Messari published their Crypto Theses, which always offer a wealth of insights for the next year. X user Stacy Muur gives you some top level takeaways so you don’t have to dive too deep. These theses are not just predictions; they are a compendium of trends, analyses, and potential strategies for navigating the ever-changing digital asset landscape.

Now, we can’t just endorse the ravings of a twitter rando, even if that rando uses the handle @twobitidiot, but flipping two bits can have enormous repercussions for any system, and he definitely has some ideas worth pondering.

Winter is settling in over the American northwest and we’re enjoying warm days at home with the family. Recently, I have indulged myself with a new pet shikoku for Christmas. How are you treating yourself this holiday season?

Keep hedging,
— Colton