🟣 Who is left to sell?

Long term tech revolutions don't necessarily concern themselves with short term macro and regulatory headwinds.

Who is left to sell? If we survived 2022, we can survive anything.    That's how the market seems to be reacting post-CFTC/Binance news, with the total crypto market cap up 4.5% in the past 24hrs. Does the largest centralized crypto institution being under heavy legal fire change the fundamentals (and narrative) of crypto having the potential to upend the entire traditional finance world?    Short term, sure…it's not a great look. But long term tech revolutions don't necessarily concern themselves with short term macro and regulatory headwinds. While the United States may be clamping down on the asset class, Hong Kong is opening up its digital asset borders. The pandora's box that is crypto was opened long ago and can't be stopped.    Yesterday's move higher can mostly be attributed to ETH rallying on news that the Shapella (Shanghai + Capella) upgrade, which will enable full and partial withdrawals for validators, is officially scheduled for April 12. At Blockworks Research we have talked extensively in prior newsletters and reports how this upgrade could encourage more ETH holders to stake their assets, putting upward pressure on the stake rate. The biggest beneficiaries of an increased stake rate are LSD protocols, and none are larger than Lido Finance. LDO traded up 11% yesterday and is currently one of the largest gainers today on my watchlist. We will likely see LSD protocols continue to trade like levered ETH for the foreseeable future.  Lastly, it wouldn't be an EffortCapital-written newsletter unless I briefly brought up something in the Cosmos ecosystem. ATOM had a nice move higher yesterday on news that native USDC is officially coming to the Cosmos ecosystem via Noble, a general asset issuance chain. One of the biggest deterrents from Cosmos DeFi growing was the lack of a native stablecoin. While ATOM does not directly benefit through a value accrual mechanism (yet), ATOM is seen as the reserve currency of the Interchain and could fetch a higher monetary premium in a growing DeFi landscape.   - EffortCapital   As the asset class matures, institutional players will want to see less narratives and more fundamentals. At Blockworks Research, we aim to bridge the gap between crypto degens like us and the traditional finance world. Whats better than getting real-time updates on protocol revenue?   As we can see above, the recent ARB airdrop has been a boon for the L2's revenue. L2 revenue is the spread between the cumulative transaction fees paid by users and the cost to post the call data to the L1. Additionally, EIP-4844 will decrease the cost for L2s to post data to Ethereum, potentially increasing the spread and creating higher value accrual for L2s.     The Frax community is on a mission to replace wETH with frxETH as a viable alternative to smart contracts post-Shapella. Bold? Yes. Impossible? Nothing is impossible in crypto.   As the largest Curve/Convex briber for over a year, Frax is in a strong position to leverage its power over CRV emissions to increase incentives to frxETH-paired pools, and in particular ETH LSDs. Doing this will likely increase the frxETH supply, increase frxETH liquidity on Curve as more frxETH holders decide to LP over stake, and increase yield for sfrxETH stakers.    With the Shapella upgrade in two weeks, and many expecting LSD protocols to gain more market share of the overall staked ETH supply, Frax is ready to put the flywheel into turbo-mode.    Elixir: A Decentralized Liquidity Engine Elixir aims to align incentives between market makers and protocols via its proprietary decentralized liquidity network. Read More → Avalanche Update: Elastic Subnets, AWM, and The HyperSDK The ability to create permissionless subnets with native tokens supporting consensus, safe communication and transfer between subnets, and more easily customized VMs means the Avalanche tech stack now represents a significant competitor to the Cosmos SDK and other app-chain ecosystems. Read More → US Losing Ground on Blockchain Developer Share: Study Regulatory clarity is needed for US to attract more blockchain-related developer jobs, according to Electric Capital Read More → EigenLayer Lines Up $50M In Bear Market Fundraise EigenLayer hopes to create a model that lets developers "easily consume trust, instead of needing to built trust" Read More → The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm's Financial Disclosures. 133 W 19th St, New York, NY, 10011 Unsubscribe