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THE DAILY INDEX

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MARKETS & BUSINESS

TLDR Crypto

2024 ELECTION: THE ROLE OF CRYPTO

A Harris Poll survey conducted for Grayscale reveals a growing interest in cryptocurrency among U.S. voters as the 2024 election approaches. Nearly one-third of American voters are now more inclined to invest in Bitcoin or other cryptocurrencies following the approval of a Bitcoin ETF. This shift is driven largely by macroeconomic factors like inflation, with many voters expecting or wanting to include crypto in their investment portfolios.

INTRODUCING PUFFERUNIFI - PUFFER'S BASED ROLLUP

Liquid restaking protocol Puffer has announced its plans for a based rollup. It will be sequenced by an L1 and use preconfirmations from Puffer's restaked validators. Puffer enables synchronous composability, allowing UniFi transactions to communicate with other based rollups directly. L2 contention fees return to ETH validators, and the unifiETH gas token generates native yield and enables gasless transactions.

THE HOT START PROBLEM: WHEN SPECULATION IS A FEATURE VS A BUG

The hot start problem is when the introduction of a token limits the window of time a startup has to find PMF and facilitate organic growth before users and liquidity decline. It is better than the cold start problem for highly competitive markets, like LRTs, and networks with passive supply-side participation, like L1s with staking or DePIN. Though tokens are valuable tools for bootstrapping networks, they require serious consideration into how to properly reward organic users and drive proper incentives across the protocol.

LIQUIDITY & UTILIZATION OF LIQUID RESTAKING TOKENS (LRTS) - JUNE

As June ends, the focus is shifting from airdrop incentives to the forthcoming AVS rewards for liquid restaking tokens (LRTs), which promise higher staking rewards. Key updates include EigenLayer's testnet rewards trial and notable events like Renzo's fundraise and product launches, EtherFi's buyback, and Pendle's maturing markets. Despite a slight liquidity dip, LRTs saw increased trading volume and continued growth in TVL, signaling ongoing interest and the importance of LRTs in DeFi's future.

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