Memecoin Mania on…Bitcoin?
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It’s kind of a weird memecoin season. $ pepe’s down quite a bit from its all-time high. Justin Sun will be publicly trading meme coins in his wallet. And the action’s even flowing to Bitcoin through BRC-20.
Here’s what we got today:
- Memecoins on Bitcoin. An introduction to BRC-20.
- Market Makers are leaving the US. Regulators are driving crypto offshore.
- Around the Web. Introduction to Chronos DEX, MakerDAO launched the Spark Protocol, and more.
Today’s email is brought to you by zkLend. Their mainnet is live!
Here’s your Edge 🗡️!
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“A good hitter can hit a pitch that is over the plate three times better than a great hitter with a questionable ball in a tough spot.” – Ted Williams
🐸 Memecoin Mania on Bitcoin
 weekly bitcoin fees via tokenterminal |
Last week, the transaction fee on Bitcoin was higher than Burj Khalifa. The average transaction fee on Bitcoin for the past week was over $14.
How do transaction fees work? Via supply and demand. We can only include a limited number of transactions in a Bitcoin block. So, the supply is limited. The demand for including transactions can vary from time to time. If there’s a huge demand, you must pay extra fees to get your transaction included. This fee paid to miners is called a transaction fee.
Why was there a huge surge in Bitcoin block-space demand? Memecoins on Bitcoin via BRC-20.
What is BRC-20? It is a new token-type on Bitcoin. However, it is nothing like the ERC-20. Since it is built on top of the Ordinal protocol, it has very limited functionality. However, this simplicity can be a feature as well. Devs have a lot of ways to rugpull on Ethereum. If you use BRC-20, the surface area is much lower.
BRC-20 was introduced in March only. It was then used to create memecoins, which have exploded in popularity. Over 14k tokens have been issued already. The total market cap has crossed $600M, and volume of the last 24 hours has crossed $200M.
Reactions to BRC-20 & memecoin mania are polarized.
In Favor:
- It unlocks new use cases for Bitcoin’s core transaction types.
- Rising transaction fees will contribute to Bitcoin’s security budget.
Opposed:
- Rising fees will prevent Bitcoin adoption among price-sensitive individuals.
- BRC-20 is a technically inferior standard that cannot be properly integrated into the wider DeFi ecosystem.
BRC-20 isn’t an isolated development. It is part of increasing activity on Bitcoin.
One point to stress is that BRC-20s should not be viewed as investments. It is gambling at best. Ultimately, the market will decide if these will survive or not.
Dive deeper:
Together With zkLend
zkLend’s Mainnet is live!
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We’ve been talking about zkLend for a few weeks now. zkLend is Starknet’s native money market, with its alpha mainnet now live!
It enables any user to deposit, lend and borrow on Starknet! 🔥
In this edition, we want to make sure that you’re ready to make the most and get in early with zkLend’s Pre-Launch Checklist and the LP LAUNCH LOTTO 👀
Before that, let’s recap zkLend:
- zkLend is built on StarkNet and supported by institutions like Delphi Digital and StarkWare
- They offer a retail permissionless product (Artemis) as well as a permissioned product for institutions (Apollo)
- Starknet is a Layer-2 on Ethereum offering zk-rollup scalability, faster transactions, lower costs, and Ethereum’s security
zkLend’s Pre-Launch Checklist campaign is now closed, but you can find the complete list of tasks here!
With the checklist, users are DeFi ready to participate in zkLend’s LP LAUNCH LOTTO with 2,500 USDC up for grabs. Taking part is as easy as:
✅ Opening and funding a Starknet-compatible wallet
✅ Depositing any asset
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👋 Market Makers are Leaving US
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Jane Street and Jump Crypto will reduce crypto market-making in the US.
Who are they? Jane Street Capital and Jump Trading are the world’s top market-making and trading groups. They have sub-divisions focused on Crypto and digital assets.
Jane Street has been in Crypto since 2017. Sam Bankman-Fried and Caroline Ellison were their alumni. Jump Crypto was launched in September 2021.
Why are they retreating? In two words, regulatory uncertainty. Following 2022 blowups, US regulators have been cracking down on Crypto.
Jane Street and Jump Crypto might have been caught up in this turmoil. They were among trading firms questioned by US prosecutors regarding the Luna disaster.
They probably thought operating in the US wasn’t worth the risk.
Don’t worry. They aren’t going to vanish immediately. Both firms are going to continue making markets on a much smaller scale.
Jane Street is reducing crypto operations globally as well. However, Jump Crypto is looking to expand its international operations.
Galaxy Digital is moving more of its operations offshore. Coinbase and Gemini recently announced derivatives platforms outside of the US. Now market makers are leaving the US too.
“Regulators are driving crypto offshore” isn’t just a meme. It is actually happening.
Project Spotlight
🌀 ChronosDEX Enters the Arbitrum DEX Wars
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Chronos became 4th largest protocol on Arbitrum within two weeks. Its TVL has already crossed $230 million.
What is Chronos DEX? It is a new decentralized exchange on Arbitrum. It is a Solidly fork that optimizes on ve(3,3) tokenomics model.
Solidly forks have generally done well where they’ve been deployed. Velodrome, the largest protocol on Optimism, is another Solidly fork. We should probably keep an eye out for Solidly forks on different chains.
How is Chronos different from Traditional DEXs? For Uniswap, incentivizing LPs with trading fees and directing revenue to governance is difficult. Chronos does the following instead:
- Incentivize LPs via CHR emissions.
- Users can vest CHR to get veCHR.
- veCHR will get trading fees and be used to vote on direct emissions.
- Protocols can directly bribe veCHR to get liquidity.
This model can harmonize incentives between all participants: LPs, Traders, Protocols, and veCHR voters.
Decentralized Exchanges are a core part of all chains. At one point, CamelotDEX seemed to have led the Arbitrum DEX wars. Now, the fight for the top spot is between Uniswap and Chronos. We’re still a long way from having clear winners and losers.
🚀 DeFi Catalysts
Chilliz Chain mainnet, the first blockchain infrastructure specifically for sports and entertainment, is officially live.
MakerDAO launched Spark Protocol. It is a money market that will allow users to borrow or supply Ether, stETH, DAI, and savings DAI.
Arbitrum is already profitable. They accumulated 3352 $ETH in revenue after refunding ~5,954 $ETH to the sequencer.
Canto, the Cosmos-based L1 chain, will vote on three proposals. If passed, the mining incentives for the liquidity pool in Canto will be reduced. (This could be good because it slows down token emissions).
Bitcoin Ordinals NFTs are coming to Binance later this month. They also said they’ll offer Bitcoin NFT creators “royalty support.”
Lido Finance will finalize the update to Lido V2 via voting tomorrow. Users will be able to convert between stETH & ETH. They also paved the way for new staking modules.
Kujira’s $Kuji is now available on Arbitrum via Axelar network. Kujira’s a layer 1 chain built on Cosmos that hosts various DeFi apps.
🌎 WHAT’S HAPPENING?
📰 Industry News
Amazon NFT marketplace could be here by May 15th. However, these are just rumors, and there’s no official confirmation from Amazon.
Ethereum Foundation (EF) sold around $30 million in Ether. In the past, markets usually slide downwards after EF sales.
Ether staking deposits overtook Ether withdrawals for the first time since Shapella Upgrade. This has removed the worry about the market dump of previously staked Ether.
WorldCoin introduced the World App to you. It is a wallet that focuses on a handful of key functionalities of Worldcoin and Ethereum to keep things simple.
Redacted Cartel announced Pirex V2 and pxBTRFLY. Pirex V2 will give users a wider range of tokens and protocols. The UI seems to be improved as well.
Pepecoin dropped around 50% from ATH. This might be traders taking profits into Ether. It could be the beginning of the end of memecoin mania.
Sam Bankman-Fried has filed motions to dismiss all but three charges against him. He’s not admitting to those three charges, either. He is pleading not guilty.
The Justice Department is investigating whether Russians used Binance to skirt the US sanctions and move money through the world’s largest crypto exchange.
Gitcoin is partnering with RocketPool to participate as a node operator and join the membership of the OracleDAO. It promotes decentralized LST along with public goods.
Ishan Wahi, a former Coinbase product manager, was sentenced to 2 years in a US insider trading case. According to US prosecutors, this is the first such case involving cryptocurrencies.
🧠 Twitter Alpha
When I come across a new protocol, I do a quick 5-min check:
• How is it unique?
• Do any chads follow their Twitter?
• Who are the founders? Who are its backers?
• Metrics: Dexscreener, DeFiLlama, Price action, etc.It’s kinda like speed dating before deeper due diligence.
— Edgy – The DeFi Edge 🗡️ (@thedefiedge) May 5, 2023
We’ve been bullish on @cosmos for a while, having chosen it as the home for @delphi_labs incubated projects
The thesis is now starting to play out, with a bunch of exciting launches on the horizon that are likely to catalyze adoption
Thread👇
— José Maria Macedo (@ZeMariaMacedo) May 8, 2023
want to share a fun side quest I’ve been working on alongside regular @BlockAnalitica risk work
a fundamental valuation framework for the Ethereum liquid staking industry
longform post in the @MakerDAO forum but i’ll share overview here
— monetsupply.eth (@MonetSupply) May 4, 2023
Cryptoeconomics blends cryptography & economics to create new communication, cooperation & organization methods, bringing the “invisible hand” to computation. Its role in blockchain success, particularly in understanding rewards & punishment mechanisms is crucial. Lets dive in!👇 pic.twitter.com/MOk3wFcfPO
— Mustafa (@digitalmustafa) May 4, 2023
What could cause even more issues for Crypto
I can think of a few things
– US crypto ban
– Binance/Coinbase insolvent
– Satoshi wallet dumps
– Ethereum OFAC fork
– Uniswap sanctioned
– 90% unrealized gains tax
– ECDSA cracked
– Beacon chain zero-day
– Craig signs Satoshi keys— ChainLinkGod.eth (@ChainLinkGod) May 11, 2023
😂 Meme
