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The protocol: use the ticket printer
One thing blockchain teams succeeded in doing a long time ago: co-opting the money printer, from initial coin offerings, or ICOs, in the late 2010s to “coin generation events.” current tokens, or TGE. In the past, stocks were sold by investment banks to clients lucky enough to get an allocation. Nowadays, popular projects just distribute the newly minted tokens to users as rewards, and they start being traded. This week saw airdrops from the cross-chain bridge team Wormhole and the “synthetic dollar” project Ethenawhose tokens suddenly have a combined circulating market cap of over $3 billion.
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SYNTHESIZE DOLLARS: Last February, The Protocol wrote about the perceived risks around the Ethena crypto projectwith its new USDe token – called “synthetic dollar” with eye-catching returns (currently 35%) from the financing of perpetual futures positions on derivatives exchanges. Apparently there are many believers in the project, or at least many speculators. On Tuesday, Ethena released some 750 million ENA tokens, or around 5% of the overall supply – for a first day of circulation. market capitalization of approximately $1.2 billion. (The fully diluted valuation, based on overall supply, is around $12 billion.) The success of the airdrop could reflect the current appetite for risk-taking among crypto traders and the unwavering will of alchemists of structured finance in crypto to test the waters for ever more complex products. Earlier this week, a separate project, the Cega derivative protocol, unveiled “Gold Rusha basket options strategy involving ether from the Ethereum blockchain (ETH) and Tether’s gold-backed XAUT tokens as underlying assets, as well as a security component that protects user capital against a 30% drop in asset prices,” as reported by Omkar Godbole of CoinDesk. “The product offers an annualized percentage return of up to 83% to investors who stake ETH, Lido staked ether (stETH), wrapped bitcoin (wBTC) or USDC stablecoin in the Lido vault. options strategy, Cega said Yield is paid in the form of coins staked, so ETH stakers receive ETH in yield, providing asymmetric upside potential in a bull market. , of course, is to avoid any asymmetrical disadvantages.
BLOBS, BLOBS, BLOBS. The Ethereum blockchain completed its milestone just a few weeks ago Dencun upgradeincluding the highly anticipated EIP-4844 proposal which created dedicated space for data storage – known as “blobs“, as part of a plan to reduce fees while easing congestion. But it didn’t take long for a new project to come along and clog up what’s known as blob space, pushing up fees and providing the nascent blob market with its first major stress test. reported last week by our Margaux Nijkerk, Ethereum gas fees for blobs increased “after a project called Ethscriptions created a new way to write data, or create inscriptions, on data blobs, called “blobscriptions”. blog post On Thursday, Ethereum co-founder Vitalik Buterin acknowledged that the Blobscriptions episode had pushed the new blob fee market into “price discovery mode,” but added that data fees still remained much lower expensive than they would have been under the old system of parking data as “call data” in a regular Ethereum transaction.
Speaking of Buterin, he also has riffed on the meme pieces. “One answer to this conundrum is to shake our heads and show how utterly abhorred and opposed we are to this stupidity. And to some extent, that is the right thing to do,” he wrote. “But at the same time we can also ask another question: if people value having fun and financialized games at least sometimes seem to offer that, then could there be a more positive-sum version of this whole concept ?” Spoiler alert: his answer wasn’t yes/no. (Fwiw come on here for our own riff last week on the coin frenzy on Coinbase’s layer 2 Ethereum chain, Base.)
Last week’s top picks our Village Protocol column, highlighting key blockchain technology upgrades and news.
Diagram showing how Celestia’s Blobstream works. (Celestia)
1. Celestiaa blockchain data availability project, said its Blobstream product – to relay commitments from Celestia’s data root using an on-chain thin client, has been deployed on Arbitrum One. According to the team: “Developers will soon be able to deploy Orbits with Celestia underneath on Arbitrum One and Base, the first modular DA integration with working Nitro fraud proofs.”
2. Degena community token from the Farcaster ecosystem, and Syndicate, a Web3 infrastructure provider, launched Dégen Channel, an ultra-low-cost L3 for the $DEGEN community built with Arbitrum Orbit, Base for settlement and AnyTrust for data availability. According to the team: “The chain’s native gas token is $DEGEN, making it one of the first community tokens with its own L3. »
3. Picasso Networkan interoperability network rooted in Cosmos, announced an integration between IBC (Inter-Blockchain Communication Protocol) and Ethereum, “enabling Seamless asset and data transfers between Ethereum and Cosmos” for the first time, according to the team: “Picasso has chosen Osmosis, the DeFi Hub, to serve as the primary destination for Ethereum assets and liquidity within the Cosmos. This integration is a step forward in bringing “IBC everywhere” and serves to connect some of the largest liquidity pools and most promising projects in the Ethereum and Cosmos ecosystems. » The team plans a Solana-IBC connection later this month.
4. Availabilitya modular blockchain solution designed to unify Web3 and optimize data availability (DA), has in partnership with the dWallet network“a pioneering decentralized, non-collusive multi-chain layer, to bring programmable native Bitcoin to rollups in the Avail ecosystem,” according to the team: “Leveraging the recently unveiled dWallet primitive and smart contracts using rollups built on Avail DA will be able to programmatically manage native BTC for the first time while preserving user ownership.
5. VILLAGE PROTOCOL EXCLUSIVE: THE Virtual Society Foundation (VSF) presents the Somnia Project, comprised of metaverse-friendly L1 and omnichain protocols, “aimed at uniting disparate virtual realms into a cohesive society capable of integrating millions of users,” according to the team. “Developed in collaboration with Improbable, Somnia’s blockchain offers transaction speeds in excess of 100,000 TPS, with sub-second finality and an affordable price, addressing the fragmentation plaguing the metaverse landscape and ensuring fair distribution of value between creators Project details were released on Wednesday with a. light paper. The VSF, revealed last weekwas initiated by Improbable, a British metaverse-focused startup that raised $150 million in 2022 with investors including a16z and SoftBank.
We were writing about various coin trading frenzies throughout March – first on Solanaand then Base. Or maybe it was just a big coin trading frenzy? Either way, it would be pretty hard for us to feign surprise at this point that the dog-themed SHIB and DOGE ended up as the month’s two best-performing tokens in the benchmark index. CoinDesk20 hint. Ethereum’s ETH was a bit more muted, gaining just 3.9% as the blockchain’s top mover. Dencun upgrade went as smoothly as possible. Solana’s SOL was a big winner, gaining 43%:
Bitcoin, the oldest and largest cryptocurrency, rose 14%, extending its winning streak to seven consecutive months and handily beating the Standard & Poor’s 500 index of U.S. stocks as well as the price of gold :
June 11-13: Summitthe XRP Ledger Developer Summit, Amsterdam.
July 8-11: EthCCBrussels.