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VC INVESTMENT DOESN'T GUARANTEE TOKEN PRICE INCREASE

This post provides a look into companies that Paradigm has invested in since the token's generation event - even top VC token investments can generate negative returns.

MARKET MAKING, DEFI, AND BAD PROTOCOL DESIGN

DeFi has been increasingly good at minimizing deadweight loss - the amount of value leaking to useless third parties.

COINBASE POSTS $1.4 BILLION IN Q2 REVENUE, CLAIMS IMPROVING ‘REGULATORY CLARITY'

Coinbase reported Q2 revenue results, returning $1.4 billion in Q2 revenue and exceeding market expectations despite an 11% drop from the previous quarter due to declining crypto prices. The company's gains were attributed to its USDC interest earnings, transaction revenue from Base, and advancements in regulatory clarity.

MARATHON DIGITAL POSTS $200 MILLION QUARTERLY LOSS AMID BITCOIN MINING SECTOR WOES

Marathon Digital Holdings reported a $200M loss for Q2 because of Bitcoin's halving event, increased global hash rates, equipment failures, and higher competition, which reduced Bitcoin production by 30% year-over-year. This is all despite a 78% revenue increase from higher Bitcoin prices and new hosting services.

INTRODUCING DECENTRALIZED US DOLLAR (DEUSD) – THE FUTURE OF DEFI MONEY

deUSD uses stETH and sDAI as collateral and earns yield by shorting perpetual derivatives, like Ethena's USDe. When funding is favorable, it hedges using longs and holds T-bills in negative funding environments. Permissionless mints and redemptions will go live in December, and deUSD will be the default collateral in the Elixir ecosystem.

DAYLIGHT ENERGY THESIS

Daylight Energy is a DePIN protocol that allows participants to contribute energy in exchange for tokens. Its team plans to build an onchain system to incentivize distributed energy and electrification, which alleviates strain on the already-overworked electricity grid. The protocol will be a marketplace for energy for tens of thousands of homes, appliances, and electric companies.

8 SURPRISING FACTS ABOUT TODAY'S WEB3 MARKET

30% of Solana's weekly active addresses interact with token contracts, which is more than DeFi. Tether holds $5 billion in BTC. Bitcoin has the poorest price performance this cycle compared to all previous halving cycles. Animoca Ventures has the most investments in the space, with over 400. Base has surpassed Optimism in TVL, surpassing the original OP Stack chain.

EXCITING CONSUMER CRYPTO TRENDS

The Variant team is excited about multiple potential developments this year and next within the crypto space. Some of the areas of excitement include crypto usage on mobile, better stablecoin infrastructure, creative prediction market formats, and integrating social and creator tools into financial platforms.

TETHER Q2 ATTESTATION REPORT

Tether's Q2 2024 report reveals record-breaking profits of $5.2 billion and highlights the company's significant ownership of U.S. Treasury bills, which surpass $97.6 billion. The group's equity reached nearly $12 billion, solidifying its financial strength and leadership in the stablecoin market.

WHICH BLOCKCHAINS ARE PROFITABLE

This analysis breaks down the revenue and profitability of the top Layer 1 (L1) and Layer 2 (L2) blockchains over the past year. While Ethereum leads in revenue, it posted a net loss due to high token issuance, unlike Tron, which is the most profitable blockchain with $271M in earnings. Base emerged as the most profitable among L2s, retaining 63% of its revenue, while others like Arbitrum and zkSync Era showed positive earnings despite the competitive environment.

GALAXY'S NOVOGRATZ ‘HOPEFUL' VP HARRIS WILL BE PRO-CRYPTO

Galaxy CEO Mike Novogratz is hopeful that Kamala Harris will soon express support for the crypto industry, highlighting the need for bipartisan support to grow the sector.

SOLANA FLIPS ETH IN MONTHLY DEX TRADING VOLUME

Solana passed Ethereum in monthly DEX trading volume for the first time in July 2024, even though it has only 1/5th of Ethereum's market cap.

PEOPLE IN CRYPTO DO NOT UNDERSTAND CAPITAL MARKETS BASICS

Tokens are currency protocols used to further growth - similar to how business equity is used to attract talent.

THOUGHTS ON THE STATE OF CRYPTO

This author shares his candid thoughts on the current state of the crypto market, warning that investing in tokens from previous cycles may be unwise as many teams have lost passion.

TERRA BLOCKCHAIN EXPLOIT DRAINS OVER $4M IN TOKENS, CHAIN HALTED

The Terra blockchain was halted after an exploit drained over $4 million in tokens, including 60 million ASTRO tokens, causing ASTRO's price to plummet. The network resumed after an emergency patch, but the exploit highlighted vulnerabilities in the inter-blockchain communication protocol, leading to sharp declines in Terra's LUNA and ASTRO tokens.

41.5% OF MT. GOX BITCOIN HAS BEEN DISTRIBUTED

Despite the recent movement of $3 billion in Bitcoin from a Mt. Gox-affiliated wallet, the market barely reacted, with Bitcoin prices holding steady. Analysts believe this is because Mt. Gox creditors are long-term holders who are unlikely to sell, and the market has already factored in these transfers.

ECLIPSE: THE BEST OF SOLANA, ETHEREUM, AND CELESTIA

Eclipse is a Solana Virtual Machine L2 that uses Celestia for DA and Ethereum for settlement. As a rollup, it may surpass Solana L1 transaction speeds while providing liquidity access to Ethereum. Its mainnet is now open for builders.

SUBSIDIARY OF JAPAN'S LARGEST INVESTMENT BANK PARTNERS WITH DINERO FOR INSTITUTIONAL LIQUID STAKING OFFERING

Laser Digital, a subsidiary of Nomura, has partnered with Dinero to launch an institutional liquid staking token fully backed by Dinero's pxETH called IpxETH. This product is designed for institutional investors seeking exposure to Ethereum staking yields, offering a unique alternative to spot Ether ETFs by providing staking benefits alongside ETH exposure.

THE BULL CASE FOR AAVE

Aave's introduction of protocol fee distributions to token stakers could mark the bottom of its negative price movement over the past few years. For this proposal to go through, it must pass a couple more votes and the protocol must hit “trigger milestones,” like the GHO stablecoin reaching a 175 million supply. The DAO is cutting expenses and its status as a blue-chip protocol is hard to replicate. It is one of the few protocols that has proven PMF along with high float and a low fully diluted valuation.

THE ULTIMATE OPSEC GUIDE

This thread highlights 20 pieces of advice to ensure general internet security and crypto wallet safety. Tips include using multiple emails with different passwords, disabling SMS authentication, and revoking smart contract approvals.

NEW RESEARCH ON DRIVERS OF CRYPTO ASSET PRICES

Uniswap Labs, Circle, and the Copenhagen Business School have released a paper explaining how traditional financial factors affect the crypto market. Since 2019, digital asset prices have been composed of monetary policy, broad market risk premium, and crypto-specific demand. Two-thirds of Bitcoin's 2022 decline can be attributed to contractionary monetary policy. 2023 and beyond's bull market has been driven by the decrease in crypto risk. Day-to-day Bitcoin volatility can be explained best by adoption and risk premium shocks.

THE RISE OF SOLANA RWAS AND STABLE COINS

Solana is rapidly emerging as a leader in stablecoins and real-world assets (RWAs), positioning itself as a key player in merging traditional finance with onchain economies. With robust stablecoin growth, particularly in USDC, and innovative RWA projects like Maple and Parcl, Solana is expanding its ecosystem to attract both retail and institutional capital. Solana is set to further solidify its place in the tokenization of real-world assets through initiatives like the Libre Fund and Jupiter's GUM Alliance aimed at driving adoption and reinforcing its position in the market.

HIGH ETH ETF INFLOWS

BlackRock's ETHA has accumulated 150,000 ETH in five trading days, demonstrating the potential of the ETFs to act as supply sinks.

HOW PARALLELABLE IS THE EVM?

The EVM's ability to run transactions in parallel depends on how much they rely on each other.

STARKNET STRUGGLING TO GET TRACTION

StarkNet is struggling, with only 10,000 daily users, low DEX volume, and fewer transactions compared to other Layer 2s.

WHAT CIRCLE'S VALUATION MEANS FOR DEFI PROJECTS

Circle's $5B valuation gives it a 2.5x revenue multiple, marginally higher than PayPal and Square and significantly below Coinbase's 15x.

POLYMARKET LP GUIDE

Polymarket rewards liquidity providers (LPs) in USDC for placing limit orders near the mid-book, with higher rewards for popular markets and double-sided LPs.

Try it for yourself: https://radquest.io/

SEC MIGHT SHELVE ALLEGATION THAT SOLANA IS A SECURITY IN BINANCE LAWSUIT

The SEC plans to amend its lawsuit against Binance, delaying the decision on whether cryptocurrencies like Solana (SOL), Cardano (ADA), and Polygon (MATIC) are considered securities. This move temporarily postpones a court ruling on these specific allegations but does not dismiss them outright.

CIRCLE SAID TO BE TRADING AROUND $5B VALUATION AHEAD OF PLANNED IPO

Circle, issuer of the USDC stablecoin, is trading at a $5 billion valuation in the secondary market before its upcoming IPO. It previously attempted to go public via SPAC in 2022 at a $9 billion valuation, but the deal fell through due to a lack of SEC approval. The exact date of the IPO remains unknown.

IRYS – THE FIRST PROGRAMMABLE DATACHAIN

Irys was initially a scaling solution for Arweave, helping it process 90% of its transactions and data. The Irys L1 chain will optimize for storage and computation and support both onchain and temporary data. It aims to be the primary data infrastructure protocol for the onchain world. Irys will allow smart contracts to directly interact with onchain data in real-time, expanding the potential of dapps and making blockspace more useful.

CALIFORNIA DMV DIGITIZES 42 MILLION CAR TITLES ON AVALANCHE BLOCKCHAIN

California is building a DMV-run blockchain for storing and transferring vehicle titles built using Avalanche L1 technology. Vehicle owners will be able to claim their digital titles in the DMV's mobile wallet app, reducing unnecessary trips to the Post Office and DMV and reducing transfer times from two weeks to a few minutes. It is one of the first projects in California's vision of incorporating blockchain into government operations.

A CRITICAL INVESTIGATION ON SOLANA

Despite bullish sentiments about Solana ($SOL), closer examination reveals significant issues with the platform's transaction data, suggesting a high level of wash trading and fraudulent activities. The exaggerated transaction volumes, primarily driven by bots and rug pulls on decentralized exchanges, raise concerns about the authenticity of Solana's reported usage metrics and its long-term sustainability.

HOW TO THINK ABOUT BLACKBIRD

Blackbird is a loyalty and payments platform for restaurants that aims to make hospitality and being a “regular” a scalable experience. It uses crypto features to enhance the user experience, like to give network ownership to restaurants and reward users with $FLY tokens. Blackbird drives greater loyalty and magical dining experiences. The interconnected nature of the loyalty program means a diner can use their $FLY rewards at any restaurant, making the token restaurant social capital. Blackbird's 2% fee is below industry average. Its ability to improve customer lifetime value helps make restaurants more profitable.

UNISWAP'S COMPETITIVE POSITION ALLOWS IT TO PRICE INDIVIDUAL POOLS

Uniswap shouldn't turn on its fee switch as it could hurt liquidity providers. Instead, Uniswap could charge fees only on trading pairs where it dominates, optimizing value capture without broadly impacting all liquidity providers.

WALL ST APPRECIATING BLOCKCHAIN PROFITABILITY

JPMorgan's recent report highlights how Ethereum's Dencun upgrade boosted Layer-2 chain profitability and predicts $20 million in net fees for Base in Q2 2024. With ETH ETFs, analysts will compare blockchain protocols like ETH and SOL to traditional businesses, recognizing their high growth and profitability.

SEC CHARGES BITCLOUT FOUNDER WITH FRAUD

Nader Al-Naji was charged with orchestrating a multi-million-dollar fraudulent crypto scheme involving the social media platform BitClout and its native token.

MOVING AWAY FROM TVL AND WALLET COUNT METRICS

The market has moved beyond bloated TVL and wallet count metrics, which often reflect artificial growth.

“SONG A DAY MAN” SUES THE SEC

Jonathan Mann, known for his "Song A Day" project, is suing the SEC over allegations that his NFT sales constitute unregistered securities.

CRYPTO HAS A TOP SUPER PAC

The Fairshake PAC has raised over $100 million and is likely one of the top 4 PACs, though the exact number is hard to quantify due to reporting errors.

COMP DOWN 6.7% AFTER SUPPOSED 'GOVERNANCE ATTACK' ON COMPOUND DAO

COMP has suffered a ‘governance attack' after a group known as the Golden Boys passed a proposal to distribute $24 million in COMP to a new protocol controlled by their multi-sig. They had two prior proposals fail, but a third went through after there was insufficient support to veto the proposal. The leader of the Golden Boys, Humpy, previously executed a similar attack on Balancer in 2022. The Compound forums state that Humpy will cancel the proposal in exchange for the protocol sharing fees with COMP holders.

POTENTIAL ISSUES WITH SENATOR LUMMIS' BITCOIN RESERVE PROPOSAL

Lummis' plan would see the US Treasury revalue its gold, which is officially valued at 1/6th its market value, and a small portion of it to purchase $64 billion worth of BTC. However, any money spent from the Treasury General account adds as much to bank reserves, and the Fed must pay interest on those reserves. Since BTC and gold are non-interest bearing, additional operation expenses could prevent the Fed from remaining self-financing.

ROLLUP-CENTRIC CONSIDERATIONS OF BASED PRECONFIRMATIONS

Taiko Labs' Gwyneth is designed to improve L2 block building profitability and timeliness using preconfirmations. Its approach addresses decentralized proposal challenges like profitability issues and timing games. The design suggests a just-in-time market for exchanging L1/L2 block space, execution tickets, and leader elections.

HERE'S EVERYTHING YOU NEED TO KNOW ABOUT $RAGE

The largest perpetual aggregator on HyperliquidX, $RAGE, is launching with a $10 million market cap, over $880 million in volume, and more than 4,000 users. Key details include its tokenomics with a $30 million fully diluted valuation, public sale without cliffs or vesting, airdrop and private investor allocations, and a unique "Rage Quit" feature to enhance community ownership by allowing recipients to forfeit a portion of their allocation to reduce inflationary pressure.

EVERYTHING ABOUT SOLANA'S CONSENSUS MODEL

This detailed infographic explains the complex details of Solana's consensus. Each 2-3 days, the leaders for each slot and the rewards pool are determined, after which blocks are proposed every 400 milliseconds. Non-conflicting transactions are processed in parallel and conflicting ones sequentially after being scheduled by the prio graph scheduler.

USEFUL ETHEREUM DEVELOPMENT TOOLS

This thread highlights libraries, frameworks, and additional tools like compilers and test suites for Ethereum dapp development. It includes 13 tools, including tevm for transaction simulation, halmos for formal verification, and EQL for querying blockchain data.

THE SLOW DEATH OF ON-CHAIN DEFI

This thread discusses the decline of on-chain DeFi, attributing it to security vulnerabilities and the rise of CeDeFi protocols. Key issues highlighted include the increased reliance on centralized off-chain infrastructure, the trend towards centralization and control by developers, and the dominance of powerful intermediaries or "solvers," which ultimately undermine the decentralized vision of DeFi by creating centralized storefronts that prioritize user experience and profitability over true decentralization.

A DEFENSE OF CRYPTO

This argument explains why a middle-class American who believes in the current system should support crypto. The government has been aggressively anti-crypto and in some cases criminal, like in the Debt Box case where the SEC was sanctioned for committing perjury. Furthermore, the current financial system penalizes small and medium-sized businesses by not providing adequate protections against the risks the banks take with their money. Change to this system will have to come from the outside, with competitive products that challenge the status quo through low transaction costs, self-custody, and a lower risk profile.

SOLANA'S CULTURE OF PURSUING GROWTH AT ALL COSTS