What Is Crypto Adoption's Current Trend & Trajectory?
Celestia & Crypto Modularity | Plutus x Radiant: plsRDNT | Latest Frax Stats
GM, this is your Daily Bolt briefing.
This Monday, we’re giving you extended reports on the topics you need to stay up to date on, including the Celestia blockchain and modularity in crypto, the latest Frax ecosystem stats, and Plutus DAO x Radiant Capital’s collaborative token, plsRDNT.
Now that the dust has settled around ETH Shapella; read on for more information about the upgrade’s impacts, as well as the future potential of Ethereum and the crypto ecosystem as a whole, from the adoption of L2s to a growing increase in industry developer activity. ⬇️
Stay vigilant in the markets.
1/ 0xResearch - The Rise of Modularity with Nick White, Celestia
Preview: In this episode of 0xResearch, Dan Smith & Sam Martin are joined by Nick White (COO Celestia) explains how Celestia's modular data-availability network enables anyone to deploy scalable blockchains with minimal overhead. Click here to listen to the full episode (82 mins).
Read our Note (7 mins) and save 75 mins.
Here are some key takeaways:
Nick White, the CEO of Celestia Labs, co-founded Harmony in 2018 to address scalability issues in blockchain technology.
After realizing that sharding was not the right approach, Nick read a whitepaper on LazyLedger in 2020, which inspired Celestia to build a modular blockchain infrastructure, with mainnet launch planned in 2023 for scalable and decentralized networks.
In Web3, users define and enforce rules, but verifying every transaction doesn't scale; Celestia solves this problem by allowing many applications and transactions while preserving the core value proposition of a blockchain.
Celestia is a modular blockchain network that addresses data availability and is designed from the ground up to be maximally modular.
Cross-chain composability requires a common data availability layer for trust-minimized interoperation. The mental model for this is Clusters, where chains sharing a common data availability layer belong to the same cluster.
Cosmos and Celestia share a vision of sovereignty that emphasizes customizability and experimentation. Celestia is a self-service consensus network that eliminates the need for developers to bootstrap a new consensus network and a new proof-of-stake token, unlike Cosmos.
Nick believes in modularism over maximalism in the blockchain stack, allowing developers to choose the components they need.
Sovereign Roll-Ups and ZK Roll-Ups are exciting for Nick due to their advantages in interoperability and developer experience.
Nick emphasizes the importance of the decentralized sequencer layer in increasing the liveness and censorship resistance of Roll-Ups.
The Lindy effect plays a role in the advantage of being on a shared sequencer with easy composability in economic activity.
2/ Plutus DAO Collaboration With Radiant Capital
Preview: In this Twitter space by Radiant Capital, they talked about their collaboration with PlutusDAO. They are joined by speakers from Wave Rider, and Isaac from Radiant Capital. Click here to watch the full episode (66 mins).
Read our Note (6 mins) and save 60 mins.
Here are some key takeaways:
The beginning at Plutus started from building on top of the Decentralized Options Exchange (Dopex) and their goal is to make liquid staking derivatives for locked assets.
Plutus has native tokens and a native liquidity pool (LP) and it comes with the trade-off of having locked tokens over time.
Users can get Parallel Price (PAR) tokens where they can get the majority of underlying dApp rewards and half of the PlutusDAO (PLS) submission that was added.
When a user is starting to use Radiant for the first time, there is a lending and depositing market and they can borrow and provide liquidity, even in the Arbitrum ARB token.
Users take the DLP token and lock it for different lengths, the longer the period, the higher the protocol fees.
People get rewards in two ways, the base yield for lending and depositing on top of that there are the protocol fees.
Whenever users go to the app, they have an option of locking liquidity directly.
In a couple of weeks, there will be a PLS radiant liquidity pool, so that users would be able to trade in and out of their PLS Radiant position.
3/ Flywheel – FraxCheck #35
Preview: In this Episode of FraxCheck, DeFi Dave and kiet discuss this week’s updates on Frax and more. Click here to listen to the full episode (26 mins).
Read our Note (2 mins) and save 24 mins.
Here are some key takeaways:
Total $FRAX supply is at 1.045B.
$FRAX's highest peg is at $1.001 and the lowest peg is at $0.998.
The collateralization ratio is at 93.8% and the decentralization ratio is at 22.4%.
Frax Base Pool TVL is at $498M, monthly volume is at $26M and utilization rate is at 5%.
FraxBP is 113% of the Curve 3pool.
The total $frxETH supply is at 141,862 (8% gain) which consists of 63% in $sfrxETH, 27% in Curve LP, and 10% on everything else.
$frxETH to $ETH exchange rate is at 0.9996.
$frxETH TVL is at $295.08M, market share is at 1.76%.
$FPI total supply is at 82.3M and the annual inflation rate is at 5% and $FPI’s peg is above at 0.05 of its peg.
Total $FPI treasury TVL is at $88.6M.
If you read these 3 Notes on Revelo Intel you would have saved: 2 hours and 39 minutes!
Bankless - The Shapella Upgrade is a HUGE Unlock for ETH
In this episode of Bankless, Ryan & David discuss Ethereum’s Shapella upgrade, Ethereum withdrawal stats, and more! They also go over L2 adoption, as Ethereum scalability will depend more on L2s, crypto adoption in Japan, and even how AI should be treated by regulators. Read our notes below to learn more.
Background
Ryan & David - Hosts of Bankless.
Layer 2 Adoption
Layer 2 adoption is increasing with new entrants such as zkSync and Polygon zkEVM.
Arbitrum remains the leader with a $6.4 billion total locked value, while the total locked value of all layer 2s is close to crossing $10 billion.
The a16z annual report has been released, giving the VC funds thoughts on the current state of crypto. It includes their new "State of Crypto Index", which includes stats around developer activity, industry job searches, blockchain transactions and more.
a16z Report
The 2023 State of Crypto report highlights the stickiness of developers in the industry, with a steady increase of 60% over the last three years.
NFT volume is still good, and there are signs of organic growth.
The report also covers the perception of crypto in the outside world, and the US is losing its lead in web3.
The proportion of crypto developers based in the US has fallen by 26% between 2018 and 2022.
Trusting Crypto
A majority of Americans are not confident in the safety and reliability of crypto, with 75% of those who have heard of crypto expressing doubt in its security.
The Ethereum Shapella hard fork went live and users, including stakers on exchanges like Kraken and Coinbase, have started withdrawing their $ETH.
FTX has recovered $7.3 billion in assets and has begun discussions about potentially restarting the exchange.
Shapella Withdrawals
The Shapella upgrade for Ethereum is significant because it allows for a full loop of $ETH to be staked and withdrawn, making the process more sustainable and secure for the blockchain.
There were concerns about a potential run on staked $ETH and a drop in $ETH price, but the market responded positively, and the $ETH/$BTC ratio increased after the upgrade.
The bottleneck of a maximum of 1800 validators per day withdrawing their $ETH restricts the supply of security to the Ethereum network, which is intended to maintain the security of the network.
This upgrade is an opportunity to redistribute stake amongst pools for a more secure Ethereum.
Nail-Biter
The Shapella hard fork block was reached and withdrawals were activated but the first few blocks turned red instead of green.
The issue was due to a bug with Lighthouse and an economic Prysm client which got fixed quickly.
Multi-client architecture is important for blockchain as hard forks are nerve-wracking and risky.
ETH Withdrawal Stats
There are dashboards available to view statistics on the beacon chain and its staking.
The total amount of staked $ETH on the beacon chain is higher than expected at 19 million.
There is a net outflow of $ETH as withdrawals are enabled, but it is not necessarily being sold.
Some service providers, such as Kraken and Coinbase, are seeing large withdrawals.
The staking APY has increased by 0.6% and many people are withdrawing their rewards rather than doing a full exit.
The recent hard fork has de-risked the protocol and may lead to increased staking in the future.
Arbitrum Foundation
There was anger from the Arbitrum community regarding the Arbitrum Foundation; the community voted against a proposal that would give 700 million $ARB tokens to the Foundation.
Arbitrum claimed the vote was not binding and the proposal went through anyway, causing further frustration from the community.
A new proposal was made to return the funds to the DAO, which was also voted against.
There is a concern about the validity of DAO votes and the need for a grace period for the initialization of a foundation and DAO.
Eric Wall, prominent crypto writer and thought leader, suggests giving control back to the DAO, but as a delegate, he will not vote against the Arbitrum Foundation despite concerns about their risk.
Euler Redemptions
Euler received all of its funds back from the hacker following their recent exploit, and has a claims page for victims to get their money back.
There is no information on the motives or identity of the hacker, but it is assumed that law enforcement put pressure on them to return the funds.
Bitcoin Lightspark
David Marcus, former Facebook and PayPal executive, has launched a startup called LightSpark to compete with the Bitcoin Lightning Network and expand Lightning infrastructure.
Marcus believes Lightning's potential is held back by the clunky and time-consuming process of node management and aims to fix this with LightSpark's user experience.
However, the main issue with Lightning's adoption remains the reluctance of users to spend Bitcoin as a unit of account. The UX problem can be solved by holding Bitcoin and spending stable coins instead.
LightSpark's development is positive for the Lightning Network and Bitcoin ecosystem, but it remains to be seen if it can solve the adoption challenge of using Bitcoin as a unit of account.
FTX Recovery
FTX has recovered $7.3 billion in assets and is considering relaunching the exchange in Q2.
The recovery of these assets would have been $6.2 billion without the rise of crypto asset prices since FTX's collapse.
Legal proceedings discussed the potential to restart the exchange but would require significant capital as the existing customer interface had little connection to the movement of money behind the scenes.
While some shareholders may be interested in relaunching, it's unlikely to regain consumer trust or compete with established leaders like Coinbase or Binance.
Japan Crypto
Japan's Liberal Democratic Party and its Web 3 project team released a white paper to promote crypto-friendly initiatives, part of Prime Minister Fumio Kishida's strategy to promote technology, including Web 3, through the Cool Japan project.
The white paper proposes tokenization as a fundraising tool for web3 startups and tax reforms that favor cryptocurrencies.
Hong Kong's top financial boss also pushes for Web 3 adoption to become the fiat banking center for crypto.
This shows the need for America and Europe to catch up with Asia's crypto-friendly initiatives.
Also; MetaMask has launched a new Buy Tab feature on their portfolio dap, allowing users to easily buy crypto directly from Fiat using various buying mechanisms.
Etherscan Token Approval
Etherscan has a tool to revoke access to smart contracts that you may have approved previously, which could pose security risks.
Users should review their wallet addresses and revoke access to contracts they don't trust.
Questions from the Nation
A Bankless Citizen lost 1.1 ETH to a scam and wonders how to combat constant scams that limit growth and reinforce negative views of the industry.
Education and time are needed, and innovation can help solve the problem.
Regulation
Chamath Palihapitiya suggests that AI needs a government oversight body similar to the FDA, FAA, and SEC, to review and approve models with broad societal impact before commercialization to prevent mistakes.
Political leaders need to create this oversight sooner rather than later.
What David’s Bullish On
David is bullish on the future of $ETH staking and sees potential for innovation and growth in the industry, including interest rate swaps and MEV capture.
Squad Staking is a concept that involves pooling resources with friends to meet the minimum staking requirements.
What Ryan’s Bullish On
Ryan is bullish on Ethereum and its upcoming hard forks, including EIP-4844 which will bring proof of stake and cheap layer 2 block space.