🟣 Higher for Longer

Four days post-Shapella and the Ethereum network has seen a net INCREASE in total validators. While ~6,600 validators have exited, over 11,650 validators have joined. What happened to those that swore for months Shapella would be an incredibly bearish event where billions in ETH would hit the market, causing a death spiral in price? Even as recently as Saturday, some were convinced the "true Shanghai dump" was imminent. Want to know what happened to those bears? They flipped bullish on Sunday. With BTC and ETH currently down on the day 3% and 2% respectively, maybe the Shapella doomers flipping bullish was the true sell signal?

Four days post-Shapella and the Ethereum network has seen a net INCREASE in total validators. While ~6,600 validators have exited, over 13,600 validators have joined. What happened to those that swore for months Shapella would be an incredibly bearish event where billions in ETH would hit the market, causing a death spiral in price? Even as recently as Saturday, some were convinced the "true Shanghai dump" was imminent.   Want to know what happened to those bears? They flipped bullish on Sunday. With BTC and ETH currently down on the day 3% and 2% respectively, maybe the Shapella doomers flipping bullish was the true sell signal? Now…I'm not trying to dance on these bears' graves, truthfully nobody knew how this event would unfold. I've personally believed that this event, as long as it went smoothly, would re-instill confidence in the market, lead to increased ETH staking, and further the market's climb higher with my timeline still in disbelief of this year's price action.   "Higher for longer" is the phrase we hear when referring to the Fed's policy around interest rates, but I think the phrase is actually referring to crypto prices for the foreseeable future (NFA).  Based on today's manufacturing index report from the NY Fed, maybe I should stick with "higher for longer" meaning interest rates. With the strong report, coupled with home builder sentiment on the rise and home sales expectations printing its first positive signal since June of last year, the economy does not seem to be slowing materially. I personally don't own a home yet, but I aspire to own one next year. In South Florida where I'm based, average home prices are still 60-80% higher from where they were pre-COVID. While there is currently a shortage in home inventory, new construction accounts for ~30% of all inventory. Compared to historical norms of around 10%, I'm hoping we see supply continue to uptick and prices continue to grind lower sometime next year just in time for me to sell some magic internet coins for a decent profit. Wishful thinking? Probably. - EffortCapital   Even in a bear market, MEV participants are still raking in substantial profits. The day has barely started in the US timezone and roughly $400K in profit has been extracted through 8,380 transactions. As searchers only capture a portion of MEV revenue, the true cost to users is likely larger than the $400K in profits today.  Two weeks ago, Cowswap released MEV Blocker, a free RPC endpoint that pays users to protect themselves from MEV. It works by routing all transactions through a network of searchers that is structured to block frontrunning and sandwich attacks. The searchers bid to backrun transactions in the MEV Blocker mempool and send 90% of the profits to users.  As of today, roughly 3,000 transactions per day are routed through MEV Blocker, representing ~0.3% of all Ethereum transactions. Most DeFi users, or even NFT users, have no reason not to use a MEV protected RPC, especially if the services provided send bundles to all major builders, meaning that there is not a significant increase in the time it takes for your transaction to be included in a block and go on chain.   Arbitrum governance had one of the most controversial governance votes in a while. AIP-1.1 and AIP-1.2 are faring much better with the votes closing in 2 hours, with 99% of votes being in support of both proposals.  As a reminder, the proposals introduced a vesting period of 4 years for the remaining 700M ARB, with the DAO having full control over the vesting contract. It also included new annual transparency reports along with semi-annual progress updates, a sample operating budget for the Foundation's first year, and usage of the Administrative Budget Wallet for ecosystem growth initiatives. Another key clause introduced in the constitution lowers the proposal threshold from 5M ARB tokens to 1M ARB tokens, which should greatly increase governance participation for the ecosystem.  All that remains is for the Arbitrum Foundation to execute on the new proposals. It should be exciting to watch how they will put $280M in ARB tokens in today's prices to work, and whether we'll see the next big partnership on Arbitrum. Skip Protocol: Sovereign MEV Skip Protocol is building toward a sovereign MEV value chain where a protocol, and its community, decide how a block is constructed and how to distribute MEV across all stakeholders. Read More → Voltz: Interest Rate Swaps for Volatile Yields Voltz is a non-custodial automated market maker for Interest Rate Swaps (IRS). It uses a concentrated liquidity virtual AMM (CL-vAMM) for price discovery, with a margin engine handling the settlement of these trades. Read More → Silk Road Hacker Sentenced After Police Seize 50,000 BTC The Silk Road hacker tried to hide stolen bitcoin and cash from law enforcement in a Cheetos popcorn container Read More → Retail Investors Can Now Trade Grayscale Solana Trust Trading as GSOL, the trust aims to directly track Solana 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