Carbono Insights #62 | Cant’ see the forest for the frogs
Deep inside, everyone in crypto is here for generational wealth — the once-in-a-century opportunity for ordinary folk to become millionaires on a whim. Yes, there’s also the part of steering the transformation of society through a technology that will hopefully make things fairer for generations to come…but guiding society is much easier when you’re wealthy. You don’t have to worry about home loans or grocery shopping. That explains the memecoin mania we’re immersed in for the whoscountingth week in a row. The $PEPE coin keeps blowing people’s minds. Riding the memecoin wave, there are innumerable copycats, and many succeed. These days, it seems like everyone in crypto has taken a vacation and gone to Vegas for some healthy(?) gambling.
Memecoins are fascinating, and they shouldn’t be taken as a joke. They are one of the purest expressions of an ancient crypto culture: there’s the gambling, the trolling, the memeing, the on-chain analyzing, the sleuthing, the bragging, and the coping. We’ve been here before: ICO season and DeFi summer were like this. But apart from the shameless gambling, we keep building. This week we’ve seen the following:
- Curve launch their stablecoin to mainnet.
- Bitcoin gets more Ethereum-y
- Lens draws the blueprint for DeSo infrastructure
- Blur launches their NFT lending solution
- Coinbase launching a Bermudan exchange
- And Hamas rejects crypto donations.
1. Stablecoins | crvUSD live on mainnet
There’s a new stablecoin in town. Curve is the 4th highest DeFi protocol in TVL, with $4.3B in total locked in the 12 different blockchains where it operates. Curve was born as an Automated Market Maker specializing in stable-value coins (stablecoins or pairs or related tokens, like ETH and stETH).
This gives them a privileged position to expand their features through crvUSD, a stablecoin that could leverage Curve’s penetration and liquidity. crvUSD has only deployed on the mainnet. It’s not yet available through any front end.
What do we know about crvUSD, and why would it impact the stablecoin ecosystem?
We know so far that crvUSD is a collateralized-debt-position stablecoin (CDP), overcollateralized, initially primarily by ETH (frxETH has also been used, according to on-chain data).
crvUSD collateral will probably include other crypto collateral soon, including LP positions, making Curve pools more appealing.
The most outstanding feature in crvUSD’s design is LLAMMA (Lending-Liquidating AMM): Curve’s unique approach to liquidations, where, instead of liquidating a full position once the liquidation price arrives, LLAMMA makes partial liquidations by accessing the market. This increases activity on Curve, generating fees for CRV and veCRV holders, and reduces the liquidation risk.
2. Bitcoin | BRC20
Most tokens you’ll see around are ERC-20. The Ethereum standard specifies rules and functions a token contract must follow to enable interoperability with other Ethereum-based applications and wallets. ERC-20 is the standard that allowed the Cambrian explosion of cryptocurrencies in full throttle state, thanks to memecoins.
Well, guess what: ERC-20s have arrived at Bitcoin. BRC-20 is a token standard that emulates Ethereum tokens, and they’re responsible for a surge in activity and fees on the Bitcoin blockchain. Once again, hardcore bitcoiners are unhappy, and it’s easy to understand why: Bitcoin was not meant to host applications. However, all current innovations stemming from Ordinals (there are even primitive smart contracts already running, like a project emulating Uniswap v2 on Bitcoin) bring new use cases to Bitcoin.
This increase in activity comes when we’re starting the countdown to Bitcoin’s next halving (in April 2024). Every time BTC emissions get cut in half, we are left wondering where the incentives for miners will come from once newly minted BTC becomes marginal.
Ordinals, BRC-20, etcetera, seem to have the key to the answer.
3. Decentralized Social | Lens’ Momoka
Did Lens design the blueprint for decentralized social media?
Lens is the Decentralized Social protocol built by the Aave team on top of Polygon’s Proof of Stake Ethereum scalability solution. The value proposition of Decentralized Social platforms comes from offering the ownership of one’s content and network graph. For example, if you ever close your Facebook account, all your content and connections go to the bin. Blockchain technology guarantees lifetime ownership of everything you build on social media.
But there’s a practical problem coming up soon: scalability. If every social media interaction (likes, RTs, shares…) had to be published on-chain, we would have a problem with speed, cost, or both.
Lens recently launched Momoka, a scalability solution that will take most transactions off-chain.
Lens has enjoyed a surge recently, reaching all-time highs in usage lately. Although, to be fair, the project is in many people’s “Wen Token” bingo cards.
4. NFT | Blur Lending
Everything was fun and games for OpenSea, the leading NFT marketplace, until Blur appeared: a swift and hyperfocused alternative emerged a few months ago, catering to professional NFT traders with a specialized UX and features. Blur started stealing market share from OpenSea until they delivered a deadly blow with the launch of their token with a carefully designed airdrop. For a while now, Blur has led the way in NFT trading.
Recently they launched Blend (the name comes from Blur Lend), a platform for what’s been called NFTFi, or NFT finance. Blend allows for basic financial operations using NFTs. So far, they’re experimenting with lending (peer-to-peer loans using NFTs as collateral) and Buy Now Pay Later, which allows users to obtain costly blue-chip NFTs by making a relatively small initial payment.
Blur keeps innovating for the most financially inclined NFT collectors. It’s not the best of times for NFTs, though (degens still apeing memecoins), but it seems appealing to financials is more profitable than to art collections — big surprise.
5. Coinbase | Coinbase International Exchange
Coinbase is starting to walk the talk. In the last chapter of their battle against US regulation, Coinbase has launched derivatives trading services for Bitcoin and Ethereum perpetual futures, registered with the Bermuda Monetary Authority. Coinbase wants to remain American but doesn’t need to. The Coinbase International Exchange is a testimony of this.
It’s been a week of small victories from Coinbas and a little teasing: the company won the first round in its lawsuit against the SEC, demanding regulatory clarity. In addition, they are shaking hands with the United Arab Emirates and praising them for their crypto-friendly stance on regulation.
Coinbase is winning this round. Who will win the fight? We don’t know.
6. Traceability | Hamas no longer accepts crypto
No day goes by without anybody (a public figure or an annoying in-law) claiming that crypto is a haven for arms dealers, drug traffickers, and terrorists. Well, some of them seem to feel the opposite.
Hamas is a military movement and political party that operates in Palestinian territory and that’s considered a terrorist organization by most Western countries. Hamas recently announced to their supporters that they would no longer accept donations in crypto “ to ensure the safety of the donors.”
The day is coming when regulators and law enforcement bodies start to praise traceability and radical transparency. The balance between transparency and privacy will be an ongoing challenge, but it’s also one of crypto’s most significant contributions as an iteration over previous forms of money.
