Artisan – #32 Weekly: May 22 – 26 | Web3 Narratives

🤔 Analysis & Thoughts

Identity first, Apps second: beyond gated Web2 platforms (Read more)

• Social media is ripe for disruption and the emergence of crypto-native social media might not be top-down but bottom-up instead. With the emergence of ZK-based attestation, we are upgrading our ability to ascribe identifiers based on user behavior and even port Web2 credentials in a credible manner
• With the proliferation of non-fungible verifiable identifiers, also known as soulbounds, we might enter a Cambrian explosion of tagging enabling social activity. This means the crypto “Web 3 social” will grow bottom-up
• Any superapp of the future (will never call itself this) will figure out how to increase switching costs for users, either directly offering lower prices because it would innovate downstream (e.g. the blockbuilding, thus offering cheaper execution), or it would just provide a unique user product that is hard to replicate

Different kinds of risks using restaking for different use cases (Read more)

• Don’t build complex financial primitives on restaking, rely on Ethereum to fork for application layer errors, or use subjective slashing
• Low risks include using restaking for highly objective attributable misbehaviors such as double signing or purely for getting the decentralization benefits of Ethereum without slashing

Four reasons why crypto startups fail (Read more)

• Relatively speaking, acquisition is easy. Retention is hard. Founders need to track their PMF quantitatively and qualitatively, measure the aforementioned metrics, etc
• It doesn’t take a ton of money and people to find product-market fit. It’s usually just a couple of people that really move the needle for the organization, and they do so by running quick experiments sequentially rather than concurrently
• It takes time to build real domain expertise in crypto and, ultimately, deep understanding of your users. But once you do, you have an unfair advantage over your competitors
• It’s remarkable how similar every bear market is. Crypto startups need to survive long enough to get lucky

Exploring historical and current yields onchain (Read more)

• Capital tends to follow incentives, and the best measure of capital incentives is tracking the yield or APY rates across different ecosystems
• Historically, spikes in yield within an ecosystem can signal future capital in flow to the ecosystem. This is especially true when the yields and underlying assets are in highly valued assets like stablecoins
• The current yield environment is seeing converging yields across major ecosystems as the predominate Layer-2 trading narrative subsides. This lack of a clear capital narrative has historically coincided with stalled or declining broader markets
• Monitoring for future spikes in yields within the top and emerging ecosystems can indicate when the market is ready to concentrate capital flows again

🌍 Layer 1/2s

Vitalik Buterin urges caution when it comes to restaking on Ethereum (Read more)

• Buterin noted that while restaking can be used for low-risk purposes, there are situations where it could compromise the mainnet’s security, such as when Ethereum validators face slashing on third-party chains
• He also suggested that such expanded roles or “duties” added to Ethereum’s consensus mechanism via EigenLayer could magnify the challenges and risks involved in operating as a validator

Privacy L1 Mina announces incentivised testnet – Testworld Mission 2.0 (Read more)

• Testworld Mission 2.0 is an opportunity for validators, zkApp developers, and users to test the Mina blockchain ahead of their upcoming Hard Fork, battle testing the network, and ensuring that code is working as intended
• To fulfil these goals, the testnet will feature 4 different tracks – zkApp end-to-end (E2E) testing, external security auditing, protocol and performance testing, and finally, preparation for the Hard Fork

Solana blockchain integrates ChatGPT plugin, launches AI accelerator (Read more)

• This integration from Solana Labs serves as a reference for how AI can make it easier to understand Solana data and protocols, or surface data about Solana’s computing infrastructure and DeFi projects
• The plugin can be used to buy NFTs, transfer tokens, inspect transactions, interpret public account data and find NFT collections by floor price

Introducing Cosmos-based concentrated liquidity DEX L1, Penumbra testnet (Read more)

• Penumbra introduces features such as fully batched execution, with no ordering to manipulate, orderbook style concentrated liquidity with arbitrary fee tiers, onchain optimal routing of user intents across trading pairs and fee tiers, and in-protocol arbitrage to auto-fill orders and internalise MEV
• This unlocks both private trading strategies that do not disclose a user’s positions or PnL to the chain, but also client-side support for passive liquidity via replicating market maker strategies that can replicate the payoff of any CFMM

Coinbase-backed Base targets mainnet launch after Optimism’s Bedrock upgrade (Read more)

• The launch is dependent on several conditions being met, including demonstrated testnet stability, Optimism’s successful upgrade of Bedrock, and completion of reviews and audits
• Built on Optimism’s OP Stack, Base is designed to serve as a rollup network, similar to Optimism, aiming to execute offchain computations on a secondary layer to facilitate faster, cheaper transactions

Starknet mainnet will update to v0.11.2 next week (Read more)

• Next week’s milestone is v0.11.2 – hitting Testnets Monday, then mainnet soon after, with its key feature being the activation of Cairo 1 and enabling of its capabilities on mainnet

Gnosis Chain successfully activated Chiado Shapella (Read more)

• The hard fork was successful, and withdrawals are now in progress, the team has also successfully tested the failure case where there’s no GNO left in the contract, and are currently processing BLS credential changes
• The next milestone for Gnosis Chain will be its mainnet launch

Ark, a second-layer protocol for making cheap, anonymous off-chain payments (Read more)

• Ark allows recipients to receive payments without acquiring inbound liquidity while preserving their receiver privacy, aiming to be as private as WabiSabi, and as convenient as onchain, and as cheap as Lightning Network
• Ark is a trustless, distinct layer two protocol with unilateral exit, enabling anonymous, scalable offchain payments through an untrusted intermediary called the Ark Service Provider (ASP), which is an always-on server that provides liquidity to the network

Ava Labs launches no-code Web3 launchpad AvaCloud (Read more)

• The AvaCloud product has four main components: an automated blockchain builder, managed validators, comprehensive data tools, and chain interoperability
• Additionally, Ava Labs recently rolled out Avalanche Warp Messaging, which allows for native communications between all Avalanche subnets, allowing users to quickly create a free testnet, launch onto mainnet and continue to add on functionality as they expand over time

Crypto security firm Unciphered claims ability to physically hack Trezor T wallet (Read more)

• Unciphered told CoinDesk in an extensive series of conversations and over email it made use of an “npatchable hardware vulnerability with the STM32 chip that allows them to dump the embedded flash and one-time programmable (OTP) data

💰 DeFi / CeFi / NFTFi

Liquid staking protocol Swell Network’s Voyage is live (Read more)

• Pearls can be collected throughout the Voyage by holding swETH and providing liquidity for eligible pools, including Balancer, Aura, Uniswap v3, Maverick and Bunni, with more pools being added in future, along with more opportunities to earn pearls by using swETH in DeFi
• Pearls represent the individual participation of each user in the voyage, and will be redeemable for future governance power for Swell Network

Onchain RWA investing protocol Centrifuge introduces mobile app (Read more)

• The Centrifuge App is a completely redesigned and unified platform for seamless investing in real-world assets onchain, and will serve as the foundation for many products currently in the works, like Centrifuge Chain and multi-chain integrations
• With a revamp to its onboarding mechanisms, users no longer need to create an account or go to a separate website to finish onboarding, being able to finish the entire process in less than 5 minutes

Binance suspends deposits for 10 bridged tokens over Multichain situation (Read more)

• The suspension of these tokens follows a five-day long crisis experienced by Multichain users, which has impacted the processing of transactions, leading to multiple stuck transactions
• Attributed to an alleged arrest of the team and various technical issues, several of Multichain’s cross-chain bridge pathways, including Kava, zkSync, and Polygon zkEVM have yet to become operational again

DCG sunsets trade execution, prime brokerage unit TradeBlock (Read more)

• Digital Currency Group (DCG) is closing down its trade execution and prime brokerage services unit, TradeBlock, citing crypto winter and regulatory uncertainties

Panic over $1.5 billion DeFi bridge Multicoin shifts to Fantom (Read more)

• Multichain has issued 35% of Fantom’s assets, including 80% of its total stablecoin market cap, according to research firm Thanefield Capital
• Fantom Foundation Director Andre Cronje told The Block that the team withdrew $2.4M worth of MULTI tokens from SushiSwap yesterday because there is “no point to LP at times of uncertainty”

Cosmos liquid staking protocol Stride’s latest liquid staked token, stUMEE (Read more)

• Stride’s latest liquid staking token is stUMEE, granting UMEE stakers at April 23 eligibility to receive an STRD airdrop
• An stUMEE/ATOM liquidity pool is expected to appear shortly on the CrescentHub DEX, supporting the integration of stUMEE within Cosmos money markets in the coming future

Bitcoin’s Ordinals economy is getting a dollar-backed stablecoin (Read more)

• Issued by company Stably, the new token Stably USD aims to become a go-to currency for traders transacting in the wave of novel assets being built on Bitcoin
• Stably’s company documents indicate it is holding Stably USD’s fiat backing with Prime Trust, and that redeemers will need to go through a KYC and AML process to swap their stablecoins for the underlying dollar value

🖼 NFT / 🎮 Gaming / 🎭 Metaverse / Social

Apple Pay Integration Breaks New Ground for Web3 Gaming App, STEPN (Read more)

• With the integration of Apple Pay, users can now take advantage of the simplicity, speed, and security of Apple’s payment solution to purchase STEPN products directly within its app
• Eliminating the need to connect a separate crypto wallet and streamlining the payment process, the integration makes it easier than ever for both existing and new users to onboard STEPN’s ecosystem and access their various offerings

Web3-friendly browser Brave introduces NFT-gated video calls (Read more)

• The new tool, added on to its existing Brave Talk video service, allows hosts to use NFTs and POAPs to manage access to calls, allowing NFT projects to chat with other holders
• While the calls are available to all Brave Talk users with a premium subscription on any browser with any Web3 wallet, the feature is only compatible with Ethereum-based NFTs for now

Web3 music platform Sound releases app (Read more)

• With the aim of reimagining a music app with fans and collectors at the heart of it, Sound’s new app allows for personal comments on tracks, displaying of a user’s friends’ activity in their feed, tracking of early listeners, and more
• The app’s next challenge is to enable purchasing of NFTs within the app

Binance enters NFT lending space, starting with ETH loans (Read more)

• Binance’s NFT marketplace has introduced a new feature that enables users to borrow cryptocurrencies using NFTs as collateral, marking its entrance into the NFT lending space
• The feature currently supports ETH borrowing against “blue-chip” NFTs, such as BAYC, MAYC, and Azuki

🏢 Institutional Adoption / DAO / RWA

Tornado Cash DAO taken over by hacker via vote fraud (Read more)

• The attacker floated a malicious proposal at the start of the weekend, which hid a code function that granted them fake votes that can now be used to handle some aspects of Tornado Cash, such as TORN tokens held in the main governance contract or withdrawal of locked TORN tokens
• Meanwhile, the Tornado Cash community has put up newer proposals that seek to revert changes made to the code, some suggesting making a new contract altogether and airdropping new tokens to holders

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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.