Carbono Insights #47 | Developers at work
After months of drama, the spotlight is back on engineering and innovation (ok, yes, with a side of bankruptcy and some crazy stuff too). We look at technical news, roadmaps, and on-chain metrics. Crypto is back to work; these days, all conversations spin around technical, financial, or cultural fundamentals.
Liquid Staking Derivatives remain the hottest topic around. This week has been full of relevant announcements, with Rocket Pool leading the buzz charts. Metamask announced the incorporation of native staking through Lido and Rocket Pool, Binance included RPL, Rocket Pool’s governance token, to its exchange, and Aave is voting for rETH as collateral. In the meantime, Frax Share became one of the best-performing tokens of the week with +50%. Frax is much more than a liquid staking provider. Their wide range of DeFi services is starting to look like the recipe for success.
Speaking about that, DeFi is also on a roll, with update announcements from Aave or Osmosis, rumors about Aave’s and Curve’s stablecoins, and Sushi sharing their roadmap. And on the topic of roadmaps, Optimism’s upcoming upgrade, Bedrock, is heating the L2 race with interesting on-chain data from Optimism.
But since we’re talking about crypto’s fundamentals, let’s not forget its crazy side, which is also dear to our hearts. This week we learned about the return of Zhu Su and Kyle Davies, captains of the defunct 3AC boat. The deck for their project GTX (because G comes after F… and GTX is like FTX…forget it) was leaked. Speaking about FTX, John Ray III, The Liquidator, announced that the US front of FTX might come back to life. Who knows.
Bitzlato won’t (Bitzwhat?). A Hong Kong-based exchange led by a Russian citizen was shut down by the Department of Justice. I just came up with an alternative name for GTX: Citzlato!
Today’s INTERPOLATION is an “abstract geometric painting of hands moving fast over a laptop keyboard” to represent where our sights are set these days.
Anyway, in today’s issue:
- Optimism VS Arbitrum, a race with two winners
- The DoJ seizes Bitz…something.
- Genesis files for bankruptcy.
- We have a new snapshot of the developer landscape.
- Some interesting BTC metrics are back in black.
- Reviewing Sushiswap’s roadmap.
⬡ Six Angles
We select six topics to illustrate the different angles from which we can approach crypto. We could choose dozens, but six is the atomic number of carbon… and otherwise, we’d be writing for ages.
1. L2 | Optimism VS Arbitrum
It was a confusing week in the L2 race. Layer 2 activity is picking up, and the two most prominent optimistic rollup projects starred in respective triumphant headlines.
But if both are winning, who’s losing?
We dove into the data, and the summary could be this: Aribtrum leads in the significant metrics like TVL and value bridged, but Optimism is picking up momentum thanks to the OP token and the upcoming launch of Bedrock. Check out all the charts in our Medium post.
2. Law Enforcement | The Department of Justice seizes Bitzlato
Crypto Twitter gasped when it saw this on the Department of Justice website.
Serious men with serious ties were going to go live and announce something serious regarding a cryptocurrency enforcement action. Everyone thought that the DoJ was about to close Binance. But they ended up closing Bitzlato.
Bitzwhat?
Bitzlato is a Hong Kong-based exchange managed by a Russian citizen nobody had ever heard of. So the community reacted with trademark trolling, memeing, and passive-aggressive sleuthing.
The truth of the matter is that, according to crypto security firm Chainalysis, Bitzlato is “one of many examples of a Russia-based cryptocurrency service that has facilitated significant amounts of money laundering on behalf of cybercriminals, including ransomware attackers, scammers, and darknet markets” and “of the highest-volume entities to interact with the Hydra dark net market.”
Jokes aside, we want regulators to be good at this, so kudos.
By the way, Binance is also in the picture as one of Bitzlato’s main counterparties.
3. Genesis | The Bitter End
Genesis has finally filed for bankruptcy. People called the Bitzlato news a nothingburger (the term used to refer to information without substance). Still, this looks like equally meaningful news since the market has been getting ready for this or worse for weeks.
Genesis has chosen to go for a “prepackaged filing” of chapter 11.
A prepackaged filing involves the debtor negotiating the terms of its plan and soliciting votes from creditors before the actual filing to speed up the time it takes to emerge from bankruptcy protection. (The Block).
The excruciating process of finding assets and distributing them started. Good luck to the Winklevi and all the creditors.
4. Human Resources | Electric Capital Developer Report
Electric Capital is an early-stage crypto venture firm. Since 2018 they’ve been reporting the crypto developer landscape: how many devs are working in crypto, what projects they are building for, do they work full-time or part-time, etc.
Their report is a milestone that ends up being used all year round to measure a project’s success, and this year Electric Capital has published it in interactive dashboard form. So nerds rejoice and click away.
You can read the key metrics and conclusions in María’s thread (she’s an investor at EC), but our main takeaway is similar to what we would say about the year 2022 in general: this bear market was unexpectedly aggressive, and it’s ok if we all feel a bit down. But crypto has been here before, and this crisis was not as life-threatening as past events in crypto, and the foundations are solid. It’s common sense to see some metrics going down, but our rock bottom today as an industry is pretty solid. It’s very likely that we will be back on our feet soon, especially since we have a team of 23k devs on our side.
5. On-chain metrics | Bitcoin’s realized price is back in black…almost
Realized price is one of the most straightforward metrics in the on-chain data landscape. It considers the price of a token at the moment of purchase to evaluate what proportion of investors are underwater at a specific moment in time. For example, whoever bought at the all-time high was below the realized price the day after. Whoever bought BTC at $100 has been in the black side of the realized price chart for a while.
Bitcoin realized price metric has been in red for most investors (except a few lucky OGs) for almost all of the second half of 2022. However, according to Glassnode, two cohorts of investors have seen green leaves recently. Short-term holders (people who bought 155 days ago or less) purchased at an average price of $18k and are now in profit. So is the average of all coin holders, whose purchase sits at $19.7k. Long-term holders will have to wait until BTC hits $22.4k to sell in profit.
Realized price is one of the metrics used to evaluate the general market situation.
6. DEX | Sushiswap revitalized
Jared Grey has been on an announcement spree since December. In SUSHI REVITALIZED, a post published in the project’s Medium, he shares the long-term vision and goals for 2023.
The subtext of the post says that Sushi had lost focus, probably sometimes due to intestine wars, and it is trying to optimize efforts, especially in two directions:
- Improving the product by focusing on the core services of a decentralized exchange and offering the best possible investor experience
- Seeking sustainability by doubling down on proven business models and leaving out some side-projects that were a distraction.
Some have said that the plan needs to be narrower to be successful. In any case, Jared’s strategy seems to tap into the widespread trend of soul-searching in DeFi.
A deeper dive into our Twitter thread:
