Artisan – #26 Weekly: Apr 3 – Apr 7 | Web3 Narratives

NFT compression on Solana, How Shanghai upgrade will benefit LSD providers, current DeFi landscape on Solana, the middleware thesis, Arbitrum messy governance proposal……

🤔 Analysis & Thoughts

UGX: user generated experiences (Read more)

• AI significantly undercuts software development timelines and costs at the core of the Web2 platforms’ moats
• Powered by AI, users will be able to generate their own custom experiences both on the content creation and consumption side, resulting in a new user-generated experience paradigm that supersedes the current user-generated content paradigm
• In order for users to generate apps that are both unique and integrated into shared data, the data layer needs to be open and composable, favoring crypto primitives
• Decentralized social is perhaps the most benefited consumer sector in crypto as it provides the data primitives needed for users to build interoperable experiences

How NFT compression on Solana will allow the real world to merge into web3 (Read more)

• The current cost to mint an NFT on Solana is 0.012 SOL. For a one-time mint, this isn’t terrible. But at scale the cost becomes enormous. If we want businesses to provide seamless experiences for users, then we can’t have such a costly barrier
• The cost comes from storing data on chain. Compressed NFTs bypass this by encoding their data into an on-chain fingerprint that references the data off-chain
• The cost becomes so cheap that people can now subsidize experiences, meaning people won’t even have to buy SOL to be onboarded

Solana introduces state compression, bringing down the cost of minting 1 million NFTs on Solana to ~$110 (Read more)

• Although state compression can be used to store any sort of data on-chain, the first use of this innovative technology is compressed NFTs. Compressed NFTs are just like regular NFTs, only drastically cheaper — minting 100 million compressed NFTs costs about ◎50 to store on-chain, compared to ◎1.2mm for their uncompressed counterpart

Analysis on LSD Providers that will benefit from Shanghai upgrade (Read more)

• Only 15.5% $ETH is staked, 1/3 is staked through LSD providers, Lido has an overwhelming 31% market share of all $ETH staked
• This is in stark contrast to a lot of the higher staking ratios we see from other L1s like Solana and Cosmos
• The top LSD providers Marketshare: $LDO: 31.26% $RPL: 2.44% $FXS: 0.64% $SWISE: 0.42% $ANKR: 0.31%

A comprehensive overview of the current DeFi landscape on Solana (Read more)

• This essay aims to provide a comprehensive overview of the DeFi landscape on Solana, highlighting key players and trends. By analyzing the strengths and limitations of these projects, they come to appreciate the unique offerings of Solana and how it compares to other ecosystems in the DeFi space
• DeFi reached new all-time highs from the DeFi summer of 2020 through the end of 2021. However, 2022 saw the first significant drop in DeFi, compounded by a series of events that shook the ecosystem. Most DeFi protocol’s native tokens have now fallen 80-90% from their all-time highs. If each chain’s number of transactions is a reflection of its daily active users, a clear pattern emerges with Solana as an outlier outperforming all the other chains
• Solana has a high DeFi velocity compared to other blockchain networks. In January 2022, Solana’s DeFi velocity was 0.25, at least twice as high as other networks

The middleware thesis (Read more)

• Building and using crypto remains painful because it requires direct interaction with L1s that have made technical and UX sacrifices to satisfy a pre-defined ethos like decentralization, scaling, etc
• Modular architecture empowers builders to permissionlessly innovate and customize on behalf of users by creating abstractions on top of L1s
• The biggest unlock of modular won’t be general-purpose solutions like rollups, but rather use-case specific protocols and networks (vertically-integrated middleware) that compete with their web2 counterparts — which will finally scale crypto to its proverbial “next 1B users”

Rethinking concentrated liquidity with Trader Joe’s liquidity book (Read more)

• Trader Joe has been the fastest growing DEX in the last 180 days following the launch of its Liquidity Book (LB), a concentrated liquidity model that competes with Uniswap V3
• Liquidity providers (LPs) benefit from fungible liquidity positions and a unique dual fee model to mitigate impermanent loss
• In recent weeks, LP profitability on top Joe V2 pools has exceeded profitability for similar pools on Uniswap V3. The upcoming launch of Joe V2.1 will introduce additional features to enhance the LB such as Auto-Pools, limit orders, Permissionless Pools, and optimized gas fees

Q1 2023 on-chain statistics (Read more)

• Quarterly fees for Bitcoin reached their highest since Q4 2021, with the advent of Ordinals’ NFT-like artifacts renewing network activity. Ethereum fees climbed to their highest since Q2 2022 due to events like the USDC de-peg and the ARB and BLUR airdrops
• Bitcoin recorded $663M worth of net inflows to CEXs in Q1, compared to $4.1B in outflows last quarter. $815M worth of ETH left exchanges this quarter, with this figure continuously decreasing, but a smaller magnitude than Q4’s $5.8B net outflows
• Bitcoin outperformed most assets in Q1 2023 and this is likely indicative of its growing appeal as a digital store of value, with it’s correlation with gold prices increasing from -0.3 at the beginning of the year to 0.9 closing the quarter
• The stablecoin wars heated up, with USDT gaining further market share as Circle struggled through the banking crisis and USDC experienced its largest de-peg to date

🌍 Layer 1/2s

Arbitrum’s first governance proposal turns messy (Read more)

• The Arbitrum blockchain’s first attempt at governance erupted Saturday over a proposal to give the Arbitrum Foundation control of 750 million ARB tokens. But ARB holders would not get a say in who or how Arbitrum Foundation allocates the nearly $1 billion sum, according to the proposal, AIP-1
• The on-chain transfers showed that 50M $ARB had been transfered to new address, but the Foundation emphasized it did not sell 50M $ARB tokens, 40M $ARB tokens have been allocated as a loan to a sophisticated actor in the financial markets space. The remaining 10 million has been converted to fiat and dedicated towards operational costs
• This proposal caused discontent among the community and token holders. TreasureDAO and Blockworks Research and others are voting against ArbitrumDAO’s AIP-1 in its current form
• Arbitrum will have a new AIPs early this week and participate in an open discussion with the DAO

Fantom Network adds De.Fi’s security tools to bolster dapp protection (Read more)

• As a security tool meant for protecting user transactions, De.Fi claims to have recorded and analysed over 12M issues from 1.15M contracts in the past two years
• De.Fi’s products for Fantom include Scanner, which can automatically assess and assign a security score to smart contracts on the blockchain, and Shield, which analyses user wallets and allows them to revoke approvals deemed risky by the tool

BNB Chain prepares for Planck hard fork (Read more)

• The hard fork on April 12 will introduce enhanced security and improved stability to the network, implementing the security enhancements proposed in BEP-171 for the network’s cross-chain bridge
• The upgrade will involve a migration from the vulnerable IAVL proof verification to the more-secure bridge security mechanism, called ICS23 specification, also introducing a timer-lock mechanism for large cross-chain fund transfers, as well as the automatic pausing of cross-chain channels in the event of forged proof detection or emergencies

💰 DeFi / CeFi / NFTFi

PancakeSwap launches v3 on Ethereum and BNB Chain (Read more)

• The v3 upgrade will allow the DEX to offer the cheapest fees for onchain trades and increased returns for LPs, at the same time introducing fee tiers and features that enhance the platform’s capital efficiency
• Following the launch, a VIP trading rewards program and a position manager feature will be introduced, incentivising more platform activity, and improving revenue, while allowing traders to easily deposit liquidity and optimise that position

Manifold Finance to build its own liquid staking platform following acquisition of Cream Finance (Read more)

• The liquid staking platform will come with its own omnichain token, called mevETH, that will offer additional yield to users who stake their ETH through MEV opportunities such as arbitraging the peg between ETH and mevETH
• Manifold has acquired Cream Finance’s validator business, bringing around 25K ETH from Cream’s contracts under its control when the protocol launches

Sentiment exploited for over $500K (Read more)

• The undercollateralised lending protocol as initially suspected to have fallen victim to a reentrancy attack, but further investigation suggest the attacker having stolen the protocol’s deployer key
• The attacker’s wallet has since been labelled and the Sentiment team are actively looking into the situation and will look to provide additional information in time

Blockchain-powered wealth management system Swissborg raises $23M in Series A funding (Read more)

• The round was carried out as a community sale with a dynamic equity valuation, attracting almost 17K different investors for a total of $23M at almost $250M valuation
• Since the launch of its crypto app in 2021, SwissBorg has become a major European player in crypto financing and investment, acquiring over a million users and growing to a team of over 200

MEV Blocker RPC launched (Read more)

• More than 30 Ethereum projects have collaborated to launch MEV Blocker RPC, a tool designed to protect users from various MEV attacks, including front-running and sandwich attacks
• MEV Blocker was jointly developed by decentralised exchange CoW Swap and two other firms operating in the MEV niche – Agnostic Relay and Beaver Build

Restaking with EigenLayer makes holding ETH much more compelling (Read more)

• EigenLayer is the first to implement the shared security model on Ethereum. This new model should attract significant interest from developers to build new services that will make dApps more useful and realize the vision of Web3
• This also presents an attractive opportunity for ETH holders. Restaking could generate an additional $11B in annual revenue for ETH validators within 5 years – 4x more revenue than from simply staking ETH itself
• In the long-run, the primary reason for holding ETH may be the opportunity to restake it. This represents a paradigm shift for ETH value accrual

fGMX proposed allocate 1.2% of all fees revenue to Chainlink for its new oracle services (Read more)

• GMX has proposed Chainlink as their oracle partner for GMX V2, in a bid to make their protocol more resilient and decentralized. Chainlink’s new low-latency oracles have been designed to cater to the needs of perpetual exchanges and other price-sensitive DeFi products, providing granular real-time market data for crypto and non-crypto markets on GMX V2

Lido Finance shares update on v2 (read more here)

• Withdrawal key-rotation ceremony is now completed, meaning all withdrawal credential messages have been successfully signed (from 0x00 to 0x01), and are now ready to be broadcasted to the Ethereum network post Shapella hard fork
• This rotation will enable withdrawals for each of the 18,632 validators post-Shapella

🖼 NFT / 🎮 Gaming / 🎭 Metaverse

Gucci and Otherside introduce KodaPendants (Read more)

• The KodaPendant is the first of many Otherside Relics by Gucci, and will present itself as a metadata upgrade for holders’ Koda or Vessel NFT and a physical necklace
• Those who are eligible to purchase will be able to do so on April 6 for a period of 24 hours or until the digital KodaPendants sell out

Mask Network acquires social curation protocol RARA (Read more)

• Aiming to build a bridge from Web2 to Web3, Mask strategically invests in decentralized social networks, infrastructure, and creative content to make Web3 more accessible to all
• With RARA, social networks and other NFT app builders can add live and historical commentary for NFTs with reactions, comments, and tags across all Web3 apps, introduce free soulbound collectibles for curating called RA! tokens, and personalise social feeds and NFT recommendations based on each user’s likes

OpenSea launches OpenSea Pro (Read more)

• The leading NFT marketplace is rolling out OpenSea Pro, a rebrand of Gem v2 as a marketplace with advanced features targeting the growing market of professional NFT traders
• OpenSea Pro will operate with 0% fees and pull listings across 170 marketplaces to provide the best deals for traders, support ‘floor sweeping’, the ability to optimise gas fees for efficient trades, and more

Masa announces soulbound ID tokens for Base (Read more)

• Masa’s soulbound tokens on Base will allow users to link identifying and reputational characteristics to their wallet addresses, making credit underwriting possible on the blockchain
• It will release a Base SBT Developer Toolkit within the coming weeks that to support the seamless deployment and interaction with SBTs on Base, which includes a quickstart guide, command line interface, software development kit, and more

Magic Eden announced the launch of its ETH platform (read more here)

• The ETH platform today is an MVP. More features to come. It will provide all ETH launchpad partners royalties and their 2% fee for 6 months

LooksRare launches V2 of NFT Marketplace with slashed fees and improved features (read more here)

• V2 offers a host of benefits to its users, including a significant reduction in protocol fees by 75% to a fixed 0.5%, huge savings on gas fees, and the ability to buy and sell NFTs with $ETH instead of $WETH

🏢 Institutional Adoption / DAO / RWA

Brazil bank BTG Pactual to issue USD-pegged stablecoin (Read more)

• BTG Pactual is preparing to launch the BTG Dol, a new stablecoin pegged to the U.S. dollar on a 1:1 ratio, using the bank’s custody services
• The stablecoin would enable holders to “dollarize” a part of their equity, and help customers interact between the traditional financial system and the new digital economy

🤖️ AI

Seedify launches ChainGPT, an AI solution for crypto and blockchain (Read more)

• The leading crypto launchpad and incubator has announced the launch of ChainGPT, an AI model which will offer blockchain analytics services, such as AI trading, smart contract development, AI auditing, risk management and more
• ChainGPT will have conduct an IDO on Seedify’s platform on April 7, at a price of $0.008 and an initial market capitalisation of $194K

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The Artisan Narrative is an educational resource intended for informational purposes only. It covers all things Web3 and may discuss assets that the Artisan Collective, ArtisanDAO or writers have financial exposure to. Views are on ours own. None of Artisan Collective, ArtisanDAO, its registered entity or any of its affiliated personnel are licensed to provide any type of financial advice, and nothing on newsletter, website and social media should be construed as financial advice. Artisan Collective, ArtisanDAO, writers might also receives compensation from its sponsor; sponsorship messages do not constitute financial advice or endorsement.