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Welcome back to 0xResearch. Here's what we've got for you today: |
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Election Day: Polymarket performance |
On the most important night of the year for Polymarket, crypto's breakout star application processed a smooth $240 million in trading volumes without a hitch. |
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It's an impressive feat for a dapp that is mostly onchain, representing perhaps one of crypto's first "mainstream" tests. |
Polymarket is designed as a "binary limit order book" (BLOB), a kind of hybrid-decentralized model that is common in many DEXs. Matching (i.e. placing limit orders) on Polymarket is offchain, while settlement and execution of trades goes onchain on Polygon's PoS sidechain. |
The underlying blockchain chugged along more or less smoothly, processing 2,921,668 transactions on election day, or about 33.8 TPS at a 7% reversion rate, Blockworks Research data shows. |
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Polygon is taking many well-deserved victory laps, but what's not talked about is how little value has accrued to its POL token despite Polymarket's success. On election day alone, Polymarket users generated a pretty minor $10,571 in fees for Polygon. |
The price of POL (previously MATIC) is up 7.2% on the day at $0.3, but still down about 54% year to date. |
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This is not a knock on Polygon; Polygon's sidechain design was aimed at delivering ultra-low fees at a time when L2s were still relatively scarce. |
Polygon's bet on POL's value accrual is aimed at the token's utility in staking for various different Polygon-related services like block batching in the Agglayer, or providing data availability within its Staking Hub/Layer in 2025. |
The plan is also to let POL stakers derive fee revenue from other Polygon CDK chains within its aggregated network of blockchains. |
But back to Polymarket — where does the prediction market go from here? |
The majority of Polymarket's usage comes from US political elections. Post-election, Polymarket's continued success will have to rely on other areas of interest that can stoke the same kind of mainstream appetite as political gambling. |
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Sports, which makes up the third-largest category of open interest on Polymarket, is one possible demand driver, but that area of gambling is also saturated with existing crypto players like Shuffle, Gandom, Rollbit, Stake.com and more, as well as a slew of Web2 offerings. |
For more on Polymarket's next steps, plug into the latest 0xResearch podcast below. |
— Donovan Choy (X: @donovanchoy | Farcaster: @donovan) |
P.S. We're looking to improve the 0xResearch newsletter and make it more relevant to your interests. Help us out by giving us your feedback in this 2-minute survey. |
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Solana vs Ethereum issuance: |
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Ethereum (ETH) and Solana (SOL) have distinct issuance models impacting their supply dynamics. Ethereum follows a decreasing issuance model, post-Merge, with rewards solely from staking. This model, combined with ETH's burn mechanism from EIP-1559, has led to net deflation in its supply — currently about -0.04% per year. |
Solana, however, operates with a fixed issuance rate, rewarding validators and increasing SOL supply at a predictable rate — an annual inflation rate of currently 5.145%, which decreases by 15% each year until reaching a long-term rate of 1.5%. |
This consistent inflation supports network security and incentivizes participation but contrasts Ethereum's deflationary leanings. |
— Macauley Peterson |
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Felix Jauvin, host and writer for Forward Guidance, joined this week's episode of 0xResearch. They discuss the election, polling data, and Polymarket performance. Here's a sneak peak of the episode: |
How investable are altcoins post-election? |
Felix Jauvin: It's hard to get excited about alts because there's a lot of downside factors and few upsides. It hinges to this ideal of Trump clearing the regulatory landscape if he wins, plus altcoin launches are broken in terms of their valuations. Jito is one example of a fantastic protocol for Solana but the gains from its token have already been made. |
Ryan Connor: There's certainly a lot of wacky valuations. A better example is the EIGEN token which has no path to value accrual, and does little with its massive TVL. The market's getting smarter and L2s are launching at lower and lower valuations. |
Boccaccio: My hot take is that the election doesn't matter and the cycle has been the same cycle it's always been. We have clear BTC dominance and then we're going to flow into riskier assets throughout. I don't think the cycles meaningfully change just because there's an election or just because the institutions are here. |
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The latest Polygon Protocol Governance Call (#26) covered multiple updates and proposals aimed at improving Polygon's infrastructure and governance. |
PIP-48: Polygon is introducing Path Based Storage Schemes (PBSS) in its PoS Bor 1.5.0 update, which will replace Hash Based Storage Schemes (HBSS). This Ethereum-inspired storage method reduces storage requirements by 74%, decreases block execution time by 60%, and cuts memory usage by 50%. However, PBSS lacks backward compatibility, and the Polygon team recommends node operators switch to this version, tested on the Amoy testnet. |
DNS Discovery: Modeled on EIP-1459, this upgrade enhances node sync by securely bootstrapping peer connections, significantly reducing sync times and improving network stability. |
PIP-47: This proposal seeks to migrate governance from Gnosis Safe to a new Aragon setup, with additional security audits underway. For now, Gnosis Safe remains in use, with a phased rollout planned. |
Community Grants Program: Polygon's first grant season allocated 34M MATIC, supporting over 700 projects across 11 categories, with a focus on consumer adoption. |
For comprehensive developer notes and dashboards, visit Polygon's protocol portal. |
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Republican challenger Bernie Moreno captured the industry's attention when he went up against a key member of the so-called "anti-crypto army." Moreno managed to capture Senator Sherrod Brown's Ohio senate seat. Some folks bet that a Trump victory would bring about a new all-time high for bitcoin. They turned out to be right, with the token surpassing $75k briefly on Tuesday night. DeFi tokens were also up massively on the Trump win. Perhaps people are optimistic that a friendly regulatory environment for crypto is on the horizon?
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