GM, this is your Daily Bolt briefing.
In this Monday edition, we’ve compiled the synopsis on what you need to know about ETH staking inflows and outflows following the Shapella upgrade.
We’ve included relevant details on a couple of recent and relevant innovations in the space, including Hourglass, a project building a liquidity time-locking layer on top of Frax for other projects to use for their own tokens. Also in the news: Uniswap has released their mobile app on Apple.
If you’ve been curious about Real World Assets (RWAs) and how they are coming into play with DeFi, be sure to read our note of the day to get Compound CEO Robert Leshner’s insights on the matter, and other happenings in the space. ⬇️
Stay vigilant.
1/ The Daily Gwei Refuel #567 - Intmax raises $5mil, Ultra Sound ETH
Preview: In this episode of The Daily Gwei, Anthony Sassano gives a recent recap on everything new in the Ethereum ecosystem and crypto ecosystems. Click here to listen to the full episode (30 mins).
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The ETH All-Core Devs call discussed various technical updates and a recap of the Shapella event.
Initial networking issues caused by many withdrawal credential changes were experienced, but most issues have been resolved.
Not all exchanges have enabled withdrawals yet, with Binance and Lido still to come.
Kraken has seen many validators exit due to regulatory action taken against them, but once withdrawals are enabled, there may not be much to discuss.
Kraken, who is being forced by the SEC to unstake their ETH, has withdrawn the most ETH by far, making the situation quite ironic.
Despite fears of a massive unstaking event, there has been a net inflow of ETH going into staking, with Kraken being an outlier.
Superphiz shared a new website called execution-diversity.info which tracks the execution clients of various staking services.
GETH is still the dominant execution client on the network, but its dominance has decreased from 90% to around 65%, which is good for the network's health.
2/ Flywheel Ep.47 - How Hourglass Rewards You For Time w/ Charlie Pyle
Preview: In this episode of Flywheel DeFi, DeFi Dave & Kiet interview Charlie Pyle of Hourglass, an innovative DeFi project that considers the time when creating markets, promotes liquidity lockup, aligns the DeFi ecosystem, and more! Click here to watch the full episode (77 mins).
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Here are some key takeaways:
DeFi Dave is an advisor to Hourglass, which is supported by PIF Labs which also supports Flywheel DeFi.
Hourglass addresses user loyalty in DeFi through long-term liquidity incentives.
Hourglass enables protocols to implement loyalty mechanisms, such as time locks.
Hourglass adds programmability to existing protocols and offers customizable staking rewards in tokenized positions.
The platform aims to support staking in the Frax ecosystem for both Frax and ETH, with the belief that Frax's liquidity will attract other protocols to pay people to stake with them rather than for "mercenary liquidity."
Retail users can stake a token for a period of time and earn rewards by going to the Hourglass website, which is a layer on top of Frax.
They would see their favorite pool and press the stake button, receiving an ERC-1155 token that corresponds to an expiry date and a balance of tokens that will unlock on that date.
3/ Bell Curve - Uniswap’s Mobile Wallet: Breakthrough or Flop? Roundup
Preview: In this episode of Bell Curve, Jason, Michael, Mike & Miles discuss the pros and cons of Uniswap's new mobile wallet. They also discuss account abstraction, the 'Fappening', ETH's Shapella upgrade and how the US is falling behind in crypto, and more! Click here to listen to the full episode (69 mins).
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Here are some key takeaways:
Uniswap's mobile app is now available on the Apple App Store after securing a place in the iOS app store following a monthly review by Apple.
It is available for users in most countries, including the United States.
Apple has historically been difficult when it comes to crypto involvement with an app that's under review by their App Store review process.
Apple charges a 30% fee to the seller of anything that goes through IAP, their in-app purchase mechanism, but Uniswap will leverage a non-custodial wallet that will allow the purchase of digital content and NFTs through a convertible virtual currency like Ethereum.
The article from ZeePrime titled "The Fappening" (Fat Happening) discusses the concept of large, multi-functional apps in the crypto space.
The concept of fat apps is discussed, with Uniswap potentially becoming an aggregator for other apps leveraging account abstraction.
If you read these 3 Notes on Revelo Intel you would have saved: 2 hours and 41 minutes!
Empire - What DeFi Gets Wrong About RWAs? With Robert Leshner
In this episode of Empire, host Jason Yanowitz is joined by Robert Leshner investor at Robot Ventures, to discuss how Defi will evolve in the wake of Operation Choke Point 2.0, Real World Assets, the App-Chain Thesis, Stablecoin Landscape, and more!
Read our notes below to learn more.
Operation Choke Point 2.0
Robert
Operation Choke Point 2.0 is a coordinated effort to debunk the crypto industry, similar to how Operation Choke Point 1.0 attempted to debunk the legal industry.
Silvergate and Signature Bank, the two primary on-and off-ramps between the banking system and crypto, have gone from functional to non-existent due to statements by regulators, legislators, and actors in the ecosystem.
Silvergate is now 100% offline for crypto companies, and there is almost no mainstream-supported infrastructure for legal institutions that interact with crypto to interact with the banking system.
Robert believes that the timing of the attack was coincidental, as it provided a justification for people who were already biased against crypto.
Jason
The collapse of FTX provided a justification for people who were already biased against crypto to attack it.
The economy has shifted to Cross River Bank, a single Bank of non-considerable size, as the loan bridge between Banking and crypto organizations.
Compound Treasury and the Defi Mullet
Robert
Compound Labs has been shuttering the compound treasury product due to multiple factors, including the business climate, the macro interest rate environment, and the aggregator business model.
Compound's product strategy was envisioned as a bridge for institutions to access Defi through a compliant Central counterparty.
Due to the collapse of FTX, the idea of using a middle layer between institutions and devices has become less appealing.
Compound Labs has also found that the aggregator business model provides a lot of value to users, but it is a tough business.
Compound Labs believes that the Defi Mullet is a viable theory and that it will be able to deliver the benefits of Defi to a wider audience.
The Return of Defi?
DeFi's virtues such as self-custody, automation, and composability are being brought to the surface by the recent calamity.
DeFi is superior to CeFi in terms of composability, as it costs nothing for the smart contract behind Uniswap to operate, and it benefits from all improvements to the different applications platforms in parallel.
Defi is going to win due to its virtues which are so strong.
Autonomous smart contracts are going to be seen as a much better tool for implementing financial markets than how they are implemented today.
BTC vs ETH
There are two views for mass crypto adoption: the Bitcoin route and the Ethereum route.
The Eth route is faster and cheaper - composable systems will eventually build better products, while the Bitcoin route is that the system is falling apart.
The second view is that the ability to build transparent, autonomous, composable Financial systems that are more powerful than the ability to have a censorship-resistant financial asset.
The third view is that the technology that proves the program’s programmability, transparency, and autonomy of a whole new generation of Finance is more valuable and more important.
Building in the U.S vs Offshore
Robert believes that the US is hostile to innovation within the crypto sphere and that most Innovation is going to occur offshore.
Robert also encourages existing Founders to start offshore, as the US is hostile to innovation and other countries are becoming more embracing of it.
Robert believes that the Compound Protocol is a successful example of how to build a system that is not controlled by a centralizing agent, and that it was developed in the open as a Playbook example for Society at large.
Coinbase is leaning heavier into its European Business when it comes to transactions.
The U.S. is incredibly hostile to innovation within the crypto sphere.
Real World Assets
The opinions of Coinbase and MakerDao matter, on whether it makes sense to pull off-chain assets from the blockchain to the off-chain.
MakerDao is quite good at taking assets from on-chain to off-chain (taking DAI stablecoin and turning it info offchain Fiat, often for institutional lenders).
MakerDao’s approach is likely to usher in a Utopia of blockchain, but until then, assets are going from the blockchain to the off-chain, which is the wrong direction.
Stablecoin Landscape
The notion of a decentralized Stablecoin that monitors inflation affects the financial decisions of the people.
The idea of a decentralized Stablecoin doesn't rely on one-to-one backing but instead relies on over-collateralization.
There was still a dollar backing on each $USDC, and they were still convertible.
The $USDC could be worth a dollar but as it deppeged it just showed that there was an irrationality that was present in the U.S. market.
Stablecoins shouldn’t operate only on just banking hours to avoid the idea of it being an imbalance in the first place.
The financial infrastructure in the U.S. can upgrade over time but, the concept of seeking out weekend hours in terms of finance; doesn't operate two out of seven days per week.
The AppChain Thesis and Value Accrual
The App chain thesis is an idea that has been discussed several times on the Empire podcast.
The App-chain thesis is semi-composability with other things in crypto, such as exchanges and blockchain bridges.
The App-chain thesis user experience and application composability are poor, making it difficult for the general public to browse.
The Flashbots team has some ideas on how to take all the Maximal Extractable Value (MEV) and redistribute it until the value is accrued to the Uni-Swap Token.
Cosmos hit a narrative about 6-7 months ago.
The app-chain thesis as an idea is incredibly valuable if people need incredibly specialized performance that they can’t get from deploying on a main chain.
Some of the best app chains people historically know so far, either have a low usage or special deployments of things just like dYdX.
Reputation, Limit Orders, and Security
Robot Ventures is an early-stage investment firm that invests in companies that have the potential to make the world better and safer.
Robot Ventures invest in companies that understand the systems and ecosystem and are comfortable being flexible in rethinking and reevaluating their assumptions.
Robot Ventures invests in companies that have the potential to make the world better and safer.
People should try to invest as early as possible in the crypto sphere because most ideas change rapidly in this evolving ecosystem.
People should feel empowered if they invest in the crypto ecosystem.