Binance invests in Pendle Finance
Binance invests in Pendle Finance
OpenSea trudges along, Shibarium crashes with $2M stuck, and many more.
NFTs seemed to be the next big thing. And they were.. for a few months. The hype faded, volumes collapsed, and now royalties are being questioned once again with OpenSea stopping their enforcement. Meanwhile, Shibarium ‘devs’ had a hiccup launching the new chain, with $2M now stuck since last week.
Today’s issue will cover this and many more, including curated content on the hottest dApp in town Friend.tech and an in-depth analysis of Ethereum’s catalysts in the edge section.
OpenSea stops enforcing royalties amidst NFTs decline
OpenSea will make NFT royalties (i.e. transaction fees) optional for new collections starting September, and March for the ones already listed. The community feedback? Well.. many are pissed off. Yuga Labs and Mark Cuban (an investor in OS) particularly.
Even though the platform has always emphasized the importance of royalties (they were as high as 10% in the past!), they had to copy its competitors to keep some market share — which is dangerously declining, as is the volume for NFTs.
Currently, OpenSea accounts for ~ 20% of the volume for NFTs, with the industry experiencing an 86.5% decline in volume since February’s local top.
The fact is, many were sold the dream of living off royalties for the rest of their lives. Then competitors came, exploiting OS’s weak spot to gain traction: fees. X2Y2 experimented with 0% fees, but generally, 0.5% marketplace fees plus none or very low enforced royalties have now become the norm.
Did you know? Nate Chastain, former product manager at OpenSea has just been convicted to 3 months of prison and a $50,000 fine for insider trading.
The platform also decided to leave the BNB chain.
As a cherry on top, the NFT aggregator Rarible will stop aggregating orders from marketplaces that do not enforce royalties, OS included.
Ordinals mania: The trading volume for Bitcoin’s ordinals fell 97% since May
Binance invests in Pendle Finance
Binance Labs just revealed that they invested in Pendle Finance. Although the amount is undisclosed, the funds raised will be used to expand its product to different chains.
Pendle Finance has caught a lot of attention in the last period. It's a DeFi application that focuses on yield tokenization. In brief, it works like this: Pendle Finance lets you earn a fixed yield, a kind of bond-like asset. It achieves this by dividing a yield-bearing token, such as Lido’s stETH, into two separate tokens: a principal token, without the yield, and the yield-bearing component. Users can buy them at a discount, and later redeem them at a set maturity to collect the generated yield.
Shibarium launch fails, $2M is stuck
The SHIBA community has been waiting for Shibarium’s launch for months, yet the launch was possibly the worst one could imagine. Shibarium is, supposedly, Ethereum’s Layer 2 aiming to provide faster and cheaper transactions to their community than the ones you have to face on Ethereum.
That is — in theory — a great idea! Yet the team seemed to lack proper technical capabilities so that all gears worked properly.
Launched on August 17, the chain crashed shortly after on the same day. Looking at the block explorer, 214 transactions were confirmed with an average block time of 4.3 minutes and 1327 wallets created. It is estimated that about $1.8M in ETH have been bridged to the L2, and have now been stuck for 7 days.
The situation is still unfolding, with the team publishing daily not-so-helpful updates. Following the crash, SHIBA experienced a 15% decline.
How much does it cost to mine one bitcoin? Coingecko reports: as low as $260 in Lebanon, with Italy claiming the record with a whopping $208,000 per BTC.
Mantle is growing quickly
Mantle Network, a Layer 2 scaling solution for Ethereum, launched on July 17 and has experienced rapid growth since then. It's been one of the quickest growths at launch in this sector. The TVL has now exceeded $36 million with its peak at $41.5 million.
Mantle Network is being developed by BitDAO, which holds one of the largest on-chain treasuries worth $3.2 billion. They recently approved a $200 million fund to support early-stage apps on their Ethereum's Layer 2, indicating that their growth is just getting started. Unlike other Layer 2 solutions, Mantle uses a modular chain design, which separates execution, consensus, and settlement into different layers and utilizes EigenDA as the Data Availability layer.
Coinbase has a stake in Circle
Coinbase took a stake in Circle, the issuer of the $USDC stablecoin. Apparently, Coinbase didn't make a payment for this stake; it seems this was part of an arrangement dating back to 2018 when Coinbase and Circle jointly introduced $USDC. From now on, Circle will have complete control over the governance of $USDC.
Furthermore, the rumor has it that Circle will be expanding native $USDC to six other blockchains, including Polygon PoS, Base, Polkadot, NEAR, Optimism, and Cosmos.
Solana Pay integrates with Shopify — link
MetaMask cancels transaction fees for USDC on-ramp on the newly launched Linea blockchain in an effort to boost its TVL
Tether discontinues USDT support on Bitcoin Omni, Kusama, and Bitcoin Cash
Mastercard hops on the CBDC train: partners with Ripple, Consensys, and Fireblocks — link
Recur shuts down after less than two years from its $50M Series-A round — link
The friend.tech corner
As soon as an article suggested that they were on the SEC radar, ‘shares’ got renamed to ‘keys’ out of concern that they could be considered unregistered securities
You might soon be able to lend & borrow keys — link
What if we split ‘keys’ into two tokens, one to access the chat and one as the right to the underlying share? — link
Is FT just dystopian hyper-monetization? — link
For the geeks: here’s how FT back-end works — link
The future is rollup-centric. That’s the motto fuelling Ethereum’s roadmap in the past couple years. You may have heard of the crypto trilemma, stating that blockchains cannot solve these three issues simultaneously: decentralisation, security, and scalability — whilst Ethereum does a great job on the first two, scalability is still quite an issue.
Performing a swap (e.g. ETH → USDT) can cost you between $5-20 depending on how busy the network is, network which has an average of 25 transactions per second (tps). For comparison, the VISA network handles on avg. 1,700 tps, while the Solana blockchain about 5,000.
To keep Ethereum competitive we bet on Ethereum rollups (Arbitrum, Optimism, ZkSync Era..), blockchains built atop Ethereum that execute transactions off the main chain (i.e. on the Layer-2 rollup), but periodically “roll-up” transactions into one that is then posted on the Layer-1 to confirm the network state and inherit Ethereum’s security.
That’s a great start, right? Yet, it’s not enough to be truly competitive. Ethereum aims to reach 100,000 tps through DankSharding, a full sharding framework which has the goal of increasing data availability for rollups, hence making it cheaper for them to settle transactions on the Layer-1.
That certainly won’t be live in 2023, but Proto-Danksharding (EIP-4844) will pave the way — Ethereum devs plan to release the Cancun-Deneb update by end of year, with the most prominent update inside it being the EIP-4844.
Proto-Danksharding will be introducing Blobs, a type of data set to release CallData (the actual standard used by rollups to settle txs on the L-1); Blobs are larger, cheaper, and will be deleted from the execution layer ~ 2 weeks after their creation. Blobs will be attached to otherwise normal transactions, called blob-carrying transactions, and since the Ethereum Virtual Machine won’t interpret them but simply achieve them on the network they won’t interfere with gas usage thus keeping gas prices reasonable.
Becoming an Ethereum rollup sounds enticing now, right? Well, blockchains agree. Celo is set to transition from a Layer-1 to an Ethereum Layer-2 secured via EigenLayer restaking. Fantom also wants to do something similar, yet wants to punctualize theirs wouldn’t be a Layer-2.
The update, along with The Verge already in the pipeline and EigenLayer’s restaking, has true potential to bolster the Layer-2 narrative and catalylst their growth. From a speculation perspective, we wouldn’t be suprised if major rollups coins were to outperform ETH following the upgrade.
Is Solana dead? A look at numbers— link
An insightful piece on crypto market cycles — link
Funding rates explained by cred — link
If you found this Leaks edition valuable, why not share it with a friend?
Forward this email—it's the best gift you can give us!
Thank you for reading and see you next week!
Disclosure: Authors may own crypto assets named in this newsletter. Stay on-chain is meant for informational and educational purposes only. It is not meant to serve as investment advice. Please consult your investment, tax, or legal advisor before making investment decisions.