The Protocol: Elections, Schmections. Blockchain’s Got Work to Do

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U.S. ELECTION COVERAGE HIGHLIGHTS:

VOTING ON SKY REBRAND STILL UNDERWAY: Members of the DeFi project MakerDAO are currently expressing their opinions on whether to reconsider the Sky brand, a name they adopted last August after initially being known as Maker. The move to Sky was met with tepid responses, and now those holding MKR tokens have been asked for their input. As previously reported by The Protocol and CoinDesk’s Sam Reynolds, this vote is non-binding, and initial participation has been relatively low.

Apologizing for past actions and starting fresh: Ethereum Foundation researchers Dankrad Feist and Justin Drake have stepped down from their advisory positions at EigenLayer, following a series of issues concerning potential conflicts of interest within the Ethereum community. In the spring, it was disclosed that both researchers had taken on advisory roles with EigenLayer. As part of this arrangement, they were each granted substantial amounts of EIGEN tokens to assist in shaping the future of the project and its development plan. “Although I believe that the agreement was made in good faith with the intention of ensuring that EigenLayer aligns well with Ethereum,” Feist stated in a post, “I recognize that the perception of this relationship has been different, and for many it is hard to reconcile this conflict of interest with my role as an Ethereum researcher.

PARAPHRASING: It’s worth noting that earning profits from cryptocurrency isn’t as simple as it appears, due to the cautiousness and skepticism of crypto investors who have been burnt multiple times before. This seems to apply to World Liberty Financial, a crypto project associated with former President Donald Trump and his sons, Don Jr. and Eric. As reported by The Protocol last month, the project initially presented ambitious plans, aiming to raise $300 million, and released a document known as a “Gold Paper” filled with fine print. Notably, the first $30 million of ‘net protocol revenues’ were earmarked for expenses, indemnities, and obligations, while the remaining amount was intended for DT Marks DEFI LLC, a company co-owned by Donald Trump. However, token sales only reached $15 million. Last week, CoinDesk’s Danny Nelson revealed that the project has filed with the U.S. Securities and Exchange Commission to terminate sales as soon as the $30 million target is met. This concession to market realities could potentially bring an end to this unusual endeavor, leaving many analysts puzzled about how Trump found time to promote a crypto project during his intense presidential campaign.

ALSO:

Coinbase CEO Brian Armstrong‘s claim in a post on X that listings on the U.S. crypto exchange are “free” drew protests from project leaders including Sonic Labs’ Andre Cronje and Tron’s Justin Sun. Bitget, a rival crypto exchange, took advantage of the topic’s salience to open a new listing application portal on its platform, stating that it’s “transparent about its listing procedures and thrives to provide token projects with the ease of exposure at best possible initial investments for its community,” along with the following testament: “Importantly, Bitget strongly emphasizes that it does not charge any fees related to the listing application process, such as commission fees, brokerage fees, application fees or assessment fees. Tokens provided by project teams will be fully allocated to Bitget users based on the agreed-upon marketing and promotional plan.”

CRYPTO COMMERCIALS EVOLVE: Advertisements for cryptocurrency have significantly improved since the rather awkward “Fortune Favors the Brave” campaign by Crypto.com, featuring Matt Damon. A few recently circulated videos managed to accomplish a rare trifecta: being “cleverly surprising,” “freshly ominous,” and maintaining an authentic “cryptocurrency feel.

Is Optimism’s ‘Superchain’ Winning the Ethereum Layer-2 Race?

Optimism Foundation Chief Growth Officer Ryan Wyatt (Optimism Foundation)

In 2023, one notable trend among top Ethereum layer-2 initiatives involved the rise of “pre-packaged blockchains,” where development teams actively endorsed creators to copy their source code and launch their own layer 2 networks.

At present, it seems that one project stands out significantly as the front-runner. Notably, when it comes to blockchain projects, the amount of funds being transferred covertly plays a pivotal role.

One of the significant second-tier networks, Optimism, has successfully persuaded numerous clients and businesses to implement their very own blockchain systems utilizing Optimism’s technology, through the OP Stack, which is distributed under open-source software agreements.

As a crypto investor, I find it noteworthy that the advancement of layer-2 networks is pivotal in the ongoing development of the larger blockchain universe. These networks serve as the core focus for developers striving to enhance transaction speed and reduce costs within the Ethereum ecosystem.

As a crypto investor, I find it intriguing when I hear about the Optimism Foundation’s tactic to attract new networks to adopt their technology. They achieve this by awarding substantial amounts of OP tokens through grant programs.

Eventually, our aim is to achieve a significant tipping point, similar to how VHS became the preferred video format in the ’80s, overshadowing Betamax.

Click here for the full article by Margaux Nijkerk

Money Center

Fundraisings

Hubert Rachwalski von Rejchwald, founder and CEO of vlayer Labs (vlayer Labs)

Deals and grants

Bea O’Carroll (Kadena)

Data and Tokens

Memecoin Share of Altcoin Market Doubles to 11% Amid Backlash Against ‘Low Float, High FDV’

We received a copy of Binance Research’s newly released report titled “The Ascent of MemeCoins: A Comprehensive Economic Analysis,” and we found it intriguingly thought-provoking. The report delves into the growth of this asset class using an economic perspective, suggesting that there may be increasing financial skepticism, particularly among younger demographics.

According to the report, the collective percentage of memecoins within the altcoin market has nearly doubled since 2023, now standing at approximately 11%. (Take a look at the graph provided.)

Additionally, there emerged a thoughtful perspective on a recurring theme, growing resistance towards venture capital-funded initiatives leveraging retail investors for exit financing.

Instead of relying on traditional funding methods, projects are increasingly tapping into private Venture Capital (VC) funding rounds to secure funds. This trend has expanded substantially over the past few years, resulting in a widespread ‘Low Float, High FDV’ scenario within the industry. One consequence of this situation is that numerous new cryptocurrencies with captivating stories and ambitious visions are set for large-scale token unlocks in the near future. This could potentially make retail traders into exit liquidity providers for VCs who invested early in private funding rounds. The token economics issue stemming from the prevalence of private token sale rounds is likely a significant factor driving the market’s move towards fair launches, transparent memecoins.

Ranking Node-as-a-Service Providers

The top sixteen companies offering native staking, as listed based on asset management according to the site Staking Rewards.

Just a few days ago, I engaged in an intriguing discussion with Pablo Larguia, the co-founder and CEO of SenseiNode, headquartered in Buenos Aires. SenseiNode is a company that offers institutional-grade staking-as-a-service, which essentially means they manage blockchain nodes for large investors.

In simpler terms, this fast-expanding company handles the task of assigning non-custodial tokens and oversees the data center-focused operations such as operating nodes and staking for other parties.

This activity seems to straddle a ground that combines the process of staking, which is similar to Bitcoin mining in the 21st century, and the role of a modern-day bond portfolio manager.

Larguia showed us how to find the industry-standard rankings for this cottage industry within the blockchain space. It involves first going to the tracking website Staking Rewards and then filtering for “native staking.” P2P.org is tops with $6.12 billion of assets under management, followed by Kiln at No. 2 with $4.91 billion, then Allnodes with $3.89 billion and stakefish with $2.6 billion. SenseiNode is No. 14 at $859.6 million, for what it’s worth.

Protocol Village

Here are some top stories from the past week featured in our “Protocol Village” section, covering significant advancements and headlines within the realm of blockchain technology.

Screengrab from Pundi AI Data demo video. This is an example of “bounding box annotation” where the user takes a “scenic image containing wild animals” and draws a box around them (Pundi AI)

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