Daily Edition · Page 6

THE DAILY INDEX

Technology, AI, software, security, crypto and business

MARKETS & BUSINESS

TLDR Crypto

ITHACA, A PARADIGM SPINOFF BUILDING A LAYER 2 ‘FROM THE FUTURE'

Crypto venture capital firm Paradigm announced that its CTO and General Partner, Georgios Konstantopoulos, will serve as CEO of the company. He will help build the full stack of products and tools that developers need to ship faster and that consumers need to have less and less friction. The Odyssey L2, built using Reth and the OP Stack, is live on testnet. To stand out in the competitive rollup space, Odyssey will first implement features from Ethereum's roadmap, including better smart contract wallets to reduce user onboarding friction.

YOU DON'T UNDERSTAND THE IMPLICATION OF RESTAKING IN LAYERZERO

LayerZero's Restaking DVN Framework built on EigenLayer introduces “Protocol Aligned Interoperability” by allowing protocols to integrate their tokens and governance into omnichain security infrastructure. It enables protocols to stake collateral to secure cross-chain communication and expand their influence beyond their infrastructure across multiple chains. Slashing conditions and trust assumptions become far more transparent. While this is promising for security and customization, the real-world implementation remains to be tested.

ARTHUR HAYES: PVP

Recent crypto token launches have underperformed for retail investors. Data shows that listing on CEXs does not guarantee price appreciation despite high listing fees. Projects have been launching at inflated valuations, benefitting VCs but harming retail investors. Founders should prioritize lower initial valuations and user growth to create a stronger and more aligned community. A DEX-first approach with gradual CEX adoption is one option to create value for users and token holders before VCs.

L1 & L2 TOKEN VALUE CAPTURE

This article introduces new financial metrics for evaluating crypto networks, including Total Economic Value (TEV), Real Economic Value (REV), and Token Holders' Net Income, emphasizing the distinction between network economics and token holder economics. It challenges common misconceptions about network profitability, particularly regarding proof of stake issuance, and indicates that L1 and L2 networks have similar profitability calculations for token holders. While the article focuses on income-generating aspects of blockchains, it also acknowledges additional value capture mechanisms like utility value and store-of-value properties, highlighting the complexity of a comprehensive and quantitative token valuation.

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