TLDR:

• Buterin’s donation funds Crosslink development from prototype to incentivized testnet and production phase. 
• Crosslink adds finality layer to Zcash’s PoW chain, preventing reversals and strengthening settlement guarantees. 
• The upgrade enables shorter exchange confirmations and improves cross-chain integration reliability for Zcash. 
• Shielded Labs operates independently from Zcash Dev Fund, relying on donations from network supporters.

Ethereum co-founder Vitalik Buterin has donated to Shielded Labs to advance Crosslink development for Zcash. The contribution will fund progression from prototype to incentivized testnet and production readiness.

Crosslink adds a finality layer to Zcash’s proof-of-work consensus, protecting against chain reorganizations and rollback attacks. This marks Buterin’s second donation to the organization.

Crosslink Enhances Zcash Security Architecture

Shielded Labs announced the donation will support Crosslink’s continued development. The upgrade strengthens Zcash’s existing proof-of-work consensus through a parallel finality layer.

Block production and economic activity remain on the proof-of-work chain. Meanwhile, the finality gadget anchors blocks and provides stronger settlement guarantees.

The architecture prevents confirmed transactions from being reversed. This reduction in double-spend risk increases confidence in transaction settlement across the network.

Exchanges can implement shorter confirmation requirements as a result. Cross-chain integrations gain improved reliability through the enhanced security model.

Applications requiring predictable settlement benefit from the increased consistency. The improvements facilitate easier integration into the broader crypto ecosystem.

Zcash maintains its existing security properties throughout the upgrade process. The design preserves the network’s core characteristics while adding protective measures.

Commenting on the donation, Buterin stated that Zcash is one of the most honorable crypto projects. He praised the network’s steadfast focus on privacy as a defining characteristic.

According to Buterin, Shielded Labs’ Crosslink work will allow Zcash to be more secure. The upgrade will enable operation on a lower security budget, supporting long-term sustainability.

Production Phase Will Focus on Technical Readiness

The donation will fund the productization of the existing Crosslink prototype. Shielded Labs plans to launch a persistent, incentivized testnet where participants can earn ZEC.

The transition into productionization involves multiple technical components. Design specifications require completion before mainnet consideration.

Security analysis will form a critical component of the development process. Audits will verify the robustness of the finality layer implementation.

Coordination with wallets and infrastructure providers ensures smooth integration. Proactive engagement with the Zcash community maintains transparency throughout development.

Progress toward mainnet activation depends on several factors. Technical readiness must meet established standards before deployment.

Security review processes need completion to validate the upgrade’s safety. Broad community support remains essential for major protocol changes.

Shielded Labs operates as a Swiss-based Zcash support organization. The team focuses on protocol development projects that strengthen network security.

Funding comes from donations by Zcash holders and supporters. The organization maintains independence from the Dev Fund and block rewards.

Buterin’s first contribution in 2023 supported formation of a dedicated Crosslink team. He has contributed to discussions around protocol design and security for years.

Shielded Labs acknowledged his continued engagement with the Zcash ecosystem. The organization expressed appreciation for his support in advancing network resilience.

The formulas that work well for venture capitalists investing in the United States — the blitzscaling mindset, the obsession with user growth over revenue, the eagerness to fund abstract infrastructure bets — simply don’t map onto Latin America, a region defined by macro instability and a consumer base that uses crypto out of necessity rather than ideology.

The Silicon Valley playbook assumes two things: that capital is abundant, and that markets are homogenous. In Latin America, neither is true. Liquidity is thinner, operating costs are higher, and each major market has its own idiosyncratic rules, banks, tax environments, and political risks. VCs entering the region must unlearn the idea that a “regional rollout” is just a matter of translating the app and hiring a local general manager. Crypto companies here scale more like logistics companies than software startups.

If VCs from the United States want to fund projects in Latin America’s crypto scene, they must write a completely new investing thesis. That means funding revenue-first businesses, valuing regulatory licensing more than “community,” prioritizing teams who understand local corridors, and letting go of the idea that what works in San Francisco will work in São Paulo. Latin America’s crypto market is not a derivative of the U.S. market; it is its own ecosystem with its own constraints and opportunities. Investors who recognize that early will dominate the next decade.

Latin America’s unique characteristics

The biggest mistake venture capitalists make when investing in Latin America is assuming the region is merely an earlier stage of the same market dynamics they understand in the United States. That assumption quietly shapes everything, from how they evaluate products to how they price risk… and it is wrong. 

In the United States, crypto adoption is often fueled by ideology, experimentation, and yield-chasing. Failure is tolerated. Switching costs are low. In Latin America, crypto adoption is more utilitarian than aspirational. People use blockchain technology to protect savings from inflation, access dollars, move money across borders, or navigate capital controls. These users are not early adopters in the typical Silicon Valley sense; they are economically constrained actors solving immediate problems.

This distinction matters because it breaks the growth-at-all-costs mindset. Latin American crypto users are pragmatic and price-sensitive. If a product is slow, expensive, unreliable, or confusing, it is abandoned immediately. There is no patience for onboarding funnels or roadmap promises. Products must work from day one, under stress, at a reasonable scale. So applying Valley-style growth models (subsidizing usage and deferring monetization) is a mistake.

The error compounds when investors treat Latin America as a downstream extension of U.S. crypto trends. Too many funds approach the region looking to localize whatever is hot in San Francisco: the next DeFi primitive, the next infrastructure layer, the next community-first protocol. 

But Latin America is not waiting for imported innovation. It is already pioneering real-world crypto use cases under conditions far harsher than those faced by developed markets. In that sense, Latin America is a leading indicator, not a lagging one. Many of the problems crypto claims it will solve in the future are already present in the region today. 

Trust dynamics reinforce this divergence. In Silicon Valley’s online-native culture, Crypto Twitter still matters enormously. As does Discord. In Latin America, trust is built offline, through institutions, brands, customer support, regulatory standing, and physical presence. Users care less about slick community strategies and more about whether a product works during a currency crisis or a banking disruption.

The art of investing

The Silicon Valley model assumes abundant capital and forgiving markets; assumptions that simply do not hold in Latin America. That’s why revenue matters much earlier for startups in the region. Liquidity is thinner, fundraising cycles are longer, and macro shocks are frequent. A startup that fails to generate revenue early is very exposed. 

Scaling further exposes the limits of software-first thinking. In the United States, expanding regionally is largely a question of marketing spend and infrastructure. In Latin America, each new country is a new financial system. It involves new banks, new payment rails, new tax regimes, new FX controls, new regulators, and new political risks. Expanding jurisdictionally is like building a logistics corridor. Investors who expect SaaS-style expansion curves systematically misjudge timelines and execution risk.

Liquidity is another axis where the Silicon Valley model fails. VCs tend to prioritize abstract network effects, assuming global scale will naturally translate into defensibility. In the Latin American crypto scene, the real bottleneck is liquidity fragmentation. Winning companies control local fiat on- and off-ramps and maintain strong banking relationships. Local liquidity, not global narratives, determines success.

Regulation completes the picture

U.S. crypto investors often celebrate regulatory gray zones as opportunities to move fast. In Latin America, regulatory arbitrage is not a viable long-term strategy. Regulation is fragmented, but unavoidable. Banking relationships, licenses, and compliance frameworks are competitive moats. Companies that “move fast and break things” often destroy their ability to operate at all. Investors who fail to value regulatory depth consistently underestimate what durability looks like in this market.

Finally, risk itself must be reframed. Silicon Valley underwriting models focus heavily on product-market fit and technical execution. In Latin America, risk is just as macro and political. Elections can trigger capital controls overnight. Banking partners can disappear. Regulatory frameworks can shift abruptly. Investors need to adapt their risk models to avoid mispricing outcomes. 

Investing in Latin America isn’t necessarily harder; it’s just different. Crypto adoption here is real, demand-driven, and already embedded in daily economic life in many places. Investors who insist on applying Silicon Valley’s playbook will continue to misunderstand the market. Those who shift their mindset will end up backing the companies with the right DNA.

Shares in crypto mining companies IREN and CleanSpark sank on Thursday as their earnings came in below Wall Street expectations and Bitcoin’s slide saw traders turn risk-off.

Bitcoin (BTC) has fallen 12% over the past 24 hours to briefly touch a low of $60,000 early on Friday. Meanwhile, the crypto market capitalization fell by almost 9%, according to CoinMarketCap.

CleanSpark (CLSK) led the decline, closing trading on Thursday down 19.13% and falling another 8.6% after-hours to $7.55 after its results for the quarter ended Dec. 31 came in below analyst predictions.

CleanSpark said on Thursday that its revenues for the quarter ended Dec. 31 came in at $181.20 million, missing analyst estimates of $186.66 million by around 2.9%.

CleanSpark misses earnings, but eyes AI as profit booster

Analysts at Zacks said that the reduced mining rewards following the Bitcoin halving in April 2024 likely led to “lower mining efficiency” and therefore potentially “constrained profit” during the period.

CleanSpark reported a net loss of $378.7 million, a sharp year-on-year decline compared to the net profit of $246.8 million it reported for the same period in 2024.