Cryptocurrencies

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[TwoCitiesCapital]

the hottest new meme coin is....Bitcoin?

 

https://www.dlnews.com/research/btc-bull-token-soars-past-25m-in-presale-as-expert-tips-100x-gains-best-meme-coin-to-buy/

 

Not sure of the mechanics of how you can airdrop BTC on Ethereum - I have to guess that "$BTC" is some other bullshit token or is a reference to some version of wrapped BTC. But should then be referred to as wrapped BTC or wBTC instead. 

 

I will believe that the bull market is over when people start getting rich on this type of stuff. That will be the heigh of euphoria - people buying something that isn't BTC, but is tied to BTCs price/success, in hopes of getting rich buying something other than BTC. 

 

Would be nice of the crypto industry outside of BTC existed for something other than degenerate gambling on shitcoins, but here we are. All roads will eventually lead back to Bitcoin. In the meantime, capital will be eviscerated in alts space. 

Edited Tuesday at 02:10 PM by TwoCitiesCapital

[Fly]

4 hours ago, TwoCitiesCapital said:

 

I will believe that the bull market is over when people start getting rich on this type of stuff. That will be the heigh of euphoria - people buying something that isn't BTC, but is tied to BTCs price/success, in hopes of getting rich buying something other than BTC. 

 

Would be nice of the crypto industry outside of BTC existed for something other than degenerate gambling on shitcoins, but here we are. All roads will eventually lead back to Bitcoin. In the meantime, capital will be eviscerated in alts space. 

 

...MSTR enters the chat...

 

I agree that BTC is the real deal and everyone is trying to profit from it in other ways, but it isn't any different than degenerate r/WSB apes buying 0 DTE on SPY. I see this as the last gasp for shitcoins really though. Retail is largely dropping the memecoins and rotating to BTC and this is the last shot at trying to get some degenerate attention before the full rotation into BTC is complete and the others die off. 

Edited Tuesday at 07:12 PM by Fly

[TwoCitiesCapital]

1 hour ago, Fly said:

 

...MSTR enters the chat...

 

I agree that BTC is the real deal and everyone is trying to profit from it in other ways, but it isn't any different than degenerate r/WSB apes buying 0 DTE on SPY. I see this as the last gasp for shitcoins really though. Retail is largely dropping the memecoins and rotating to BTC and this is the last shot at trying to get some degenerate attention before the full rotation into BTC is complete and the others die off. 

 

Oh, trust me. I'm watching MSTR too. Trading at a 3-4x premium to NAV was worrisome. The recent correction has me feeling better about the path forward though. 

 

Last cycle was similar. MSTR traded higher/faster than BTC appreciated, topped earlier, and then the ratio of MSTR/BTC faded into BTCs top. Then alt coins rallies. Then everything died. So far, only MSTR has topped so there are more steps left if we follow the same pattern. 

 

I dunno when the 4-year cycle will break. Maybe it's this year. But if it continues, it implied a high sometime in the fall with highs significantly higher than we're at now. 

 

And if it is broken? All bets are off, but that also means the traditional 80+% decline is probably off the table too. 

Edited Tuesday at 08:36 PM by TwoCitiesCapital

[Paarslaars]

I think the cycle is already broken with ETF's and politics coming into play but we'll see.

[TwoCitiesCapital]

1 hour ago, Paarslaars said:

I think the cycle is already broken with ETF's and politics coming into play but we'll see.

 

I think it's possible. But people said the same with the launch of futures and futures ETFs and it played out the same. 

 

I know it WILL break. But until it does, I use it to guide me. 

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Blockchain Valuation
Blockchains in general (whether L1s or L2s) have a couple sources of revenue from flows.

The first is congestion fees, aka "base fees". The second is contention fees, aka "MEV".

Let's tackle contention fees first. IMO, with modern app and wallet design, we should expect MEV to increasingly flow upstream and be recaptured by apps, wallets, and/or users. Eventually almost all MEV will be recaptured by entities closer to flow originators, and downstream infrastructure like L1s and L2s should expect breadcrumbs from contention fees. In other words, chasing MEV is IMO likely long-term futile for L1s and L2s.

What about congestion fees? For Ethereum L1 historically the bottleneck was EVM execution. Considerations for consensus participant, things like disk I/O and state growth, were key drivers for setting a small execution gas limit. With modern blockchain design that use SNARKs or fraud proof games for scaling, we will increasingly live in a post-scarcity world for execution. The bottleneck then shifts to data availability, which is fundamentally scarce because Ethereum validators run on limited home internet connections, and in practice DAS only provides a linear ~100x scalability boost unlike fraud proofs and SNARKs which provide an essentially unbounded scalability boost.

So let's zoom into DA economics which I claim is the only sustainable source of flows for L1s. EIP-4844, which suddenly increased DA supply in a sizeable way through blobs, went into effect less than a year ago. The chart titled "Average Blob Count per Block" in this dashboard clearly shows demand growth for blobs over time (IMO largely driven by induced demand), with demand progressively growing from 1 blob/block, to 2 blobs/block, to 3 blobs/block. We're now saturating blob supply but are only at the beginning of blob price discovery, where low-value "spam" transactions are slowly being pushed away by economically-denser transactions.

If DA supply was left unchanged for a few months I'd expect hundreds of ETH burn per day from DA. However right now Ethereum L1 is in "growth mode", and the Pectra hard fork (coming within a few months) will double the target number of blobs per block, from 3 to 6. This DA supply flood should crush the blob fee market, and it will take a few months for demand to catch up again. As full danksharding is rolled-out over the next couple years there will be a cat-and-mouse game between DA supply and demand.

What about the long-term equilibrium? My thesis hasn't changed since my 2022 Devcon talk titled "ultra sound money". Long term I expect DA demand to outpace supply. Indeed, supply is fundamentally constrained by consensus participants running on home internet connections, and I don't think the equivalent of ~100 home internet connections of DA throughput is sufficient to satisfy world demand, especially as humans always find creative ways to consume more bandwidth. In ~10 years I expect Ethereum to settle 10M TPS (roughly 100 transactions per day per human) and even at little as $0.001/transaction is $1B/day of revenue

Of course, DA income is only part of the story for long-term value accrual of ETH. The two other important considerations are issuance and monetary premium—for those I would refer to my 2022 Devcon talk.

Source: 

 

Edited Wednesday at 12:52 AM by [email protected]

[nwoodman]

 

I do enjoy the internet at times.  

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Stablecoin is the best PMF of Crypto and is growing rapidly. Many people predict Stablecoin will change payment, banking, finance... landscape.

What is your stablecoin strategy?

I see this article cover quite good amount of info about Stablecoin.

https://www.fintechbrainfood.com/p/what-s-your-stablecoin-strategy

[Longnose]

20 hours ago, nwoodman said:

 

I do enjoy the internet at times.  

LOL thanks for this

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From Stripe Annual Report:
Stablecoins: Room-temperature superconductors for financial services.

Stablecoins have four important properties relative to the status quo. They make money movement cheaper, they make money movement faster, they are decentralized and open-access (and thus globally available from day one), and they are programmable. Everything interesting follows from these characteristics.

https://assets.stripeassets.com/fzn2n1nzq965/2pt3yIHthraqR1KwXgr98U/df10795aac0205789956c89e0dfc4f1a/Stripe-annual-letter-2024.pdf