🟣 "Proceed Carefully" - Blockworks Newsletter

GM newsletter enjoyooors.

The Fed left rates unchanged at yesterday’s FOMC meeting, maintaining the 5.25-5.50% range. Fed Chairman, Jerome Powell, used the words ‘proceed carefully’ numerous times throughout his Q&A, which has led to speculation that the Fed is in no rush to make additional rate hikes.

Danielle DiMartino Booth took to Forward Guidance to share her thoughts, which can be summed up in three words, “higher for longer”. We recommend giving that interview a listen, as Danielle is far more qualified than myself to talk macro shop.

Back in crypto land, Optimism announced yesterday that it has sold 116M OP tokens from the treasury, split evenly across 7 purchasers. The tokens will be subject to a 2 year lockup, but many folks are wondering why the DAO’s token holders had no say in the sale.

The dYdX V4 mainnet launch appears to be imminent, with 1-click onboarding announced yesterday in partnership with Axelar and Squid Router. Users will be able to onboard to dYdX in under 30 seconds from Avalanche, Optimism, Base, Polygon, and many others on day 1. I, for one, am a huge fan of Antonio and can’t wait to hear user feedback on dYdX V4 (because I am a US citizen and can not use it myself).

MKR has outperformed the market since Blockwork Research’s very own 0x__Brick dropped a MakerDAO report and financial model for our subscribers on August 24, 2023. While a high interest rate environment is generally a horrible thing for risk assets, Maker enjoys higher revenue on DAI’s RWA collateral backing. MKR is up 30% since the report.

Fred Thiel, the CEO of Marathon, one of the largest publicly traded Bitcoin miners, expressed his concerns over Bitcoin’s transition from relying on block subsidies to transaction fees in a recent interview.

He goes on to say that BTC halvings are fading into irrelevance in terms of the effect it has on price action, and that liquidity/business cycles are the main driver. He also says that Bitcoin needs to attract more users by expanding its use cases in order to increase transaction fees. It’s refreshing to hear an important figure in the Bitcoin industry acknowledging the lack of sustainability around Bitcoin’s current security model.

Just one more day until Friday. Hang in there, fellow 9-5er’s.

– Sam Martin

Drive more value from crypto with Blockwork’s brand new, institutional-grade onchain data and analytics product—Blockworks Analytics—now live on our research portal! This new product is available at no additional cost to Blockworks Research subscribers.

Blockworks Analytics seamlessly integrates all the best in digital asset data and analytics, providing transparent and reliable information on L1s, L2s, and DeFi protocols via our asset-specific dashboards. Whether you’re interested in monitoring the health and profitability of major networks and protocols such as Bitcoin, Ethereum, Solana, and Arbitrum, to name a few, to financials, activity, and token-related statistics, we’ve got you covered so you can focus on idea generation, thesis creation, and portfolio management.

Jito, a liquid staking provider on Solana, has seen explosive growth over the past month, which recently accelerated even further after the launch of a points program last week. Jito runs a fork of the main Solana validator client and enables the network to run more efficiently, while passing MEV rewards back to stakers of jitoSOL, on top of the standard SOL staking rate. The platform currently has 53 validators and 12,777 unique stakers. While there are only a few protocols that are worth interacting with on Solana, Jito certainly makes it to the top of the list.

With the Arbitrum Short Term Incentive Program (STIP) kicking off, protocols are applying left and right to get their hands on some ARB. Among the protocols, we have seen Frax come in to request 1.5M ARB to incentivize sfrxETH, frxETH, FRAX, and FPI utilization on Arbitrum. Dopex, Silo, and Arrakis have also entered the ring. One of the most beneficial Arbitrum grant requests comes from Wormhole, who is seeking 2.5M ARB to incentivize the injection of $100M native USDC into the Arbitrum ecosystem, utilizing Circle’s CCTP. The 2.5M ARB is meant to stimulate the minting of USDC on Arbitrum, and the reward rate is set at 8% for USDC providers. Users that use Wormhole to mint USDC with CCTP and hold their USDC on Arbitrum will be eligible for this return, compounding every seven days.

Pendle: The Intersection of Yield Trading and RWAs

Pendle is the market leader in DeFi yield trading and could be poised for significant growth through domination in LST interest rate derivatives and RWA integrations.

Base: Signs of Early Success

Base has doubled-down on its commitment to the Superchain vision, has shown early signs of success with nearly $400M in TVL, and has become home to novel dapps such as friend.tech which has seen significant traction.

Coinbase pushes ‘Pessimism’ to boost Base security

The open-source monitoring system is capable of identifying threats in the OP Stack and other EVM blockchain events

Hong Kong regulator ramps up probe of JPEX trading platform

On Thursday, the Securities and Futures Commission issued a statement disavowing any communication with JPEX saying that the platform is unlicensed

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.

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