Welcome back to 0xResearch – quick hitting alpha for the crypto degens. Here's what we got for you today:
Leaning towards approval
DappCon: a Self-Custodial Bank
Gaming funding vs results
CT: EiganDA launch, ETH sentiment shift
What a difference a few days makes! Monday was a holiday where I live (Germany), so I was watching the ether fireworks (up almost 20% on the day) while pretending to touch grass.
By many accounts, the odds of the SEC approving a spot ether ETF tomorrow have shifted radically in favor of a "yes." That’s a remarkable turnaround considering that most observers had written it off until later this year or even until 2025.
The Bloomberg bros are eating crow.
Following the SEC’s 11th-hour attitude adjustment, would-be ETF issuers are left scrambling to get their legal ducks in a row.
Assuming ETH had previously "priced in" a rejection, has it now fully priced in an approval?
Banking 3.0
If neobanking, which provides a better tech front-end to legacy banking, is considered banking 2.0, then banking 3.0 is part of the "ownership era." This was the message from Gnosis Pay CEO Marco Nunes at DappCon in Berlin today: Separate bankers from banking.
The idea is to combine the best of fintech UX with the flexibility and self-determination of crypto, with blockchain-native composability at its core.
This is very appealing in the European Union’s open banking idealism. But extensive TradFi integrations are still missing. Local connection strategies still differ by jurisdiction.
What happens to banks? "Users will decide if they should exist or not."
Building on that same line of thought, Zeal founder Hannes Graah demonstrated slick new features of the project's recently launched smart wallet. Zeal is a mobile app and web extension that deploys a Safe in the backend, like Gnosis Pay, and hooks into the same Visa card. It also offers fiat on- and off-ramping.
Zeal takes it a step further by providing access to the Gnosis Pay card within the app and also a user’s other wallets with access to DeFi, all recoverable across devices with biometric passkeys.
Where are the games?
$1 billion and 2.5 years is a lot of money and time spent on development with little to show for it in the area of crypto gaming.
If you’re not named Parallel or Pixels, your game either hasn’t launched or has failed to gain traction.
As with other parts of the industry, the past few years have seen a major focus on infrastructure development — with high FDV token launches attached.
Sure, there’s a bit of a chicken-and-egg problem — you need high throughput infra rails to make way for new experiences. But just as 2024 should see a renewed focus on building useful applications on crypto rails, more work needs to be done to develop compelling games that are both fun to play and that take advantage of the "ownership era" — shallow Ponzinomics aside.
Although these are strong narratives, the key driving force behind crypto gaming will likely be financial incentives through tokens, similar to how SocialFi apps flourished under financial incentives and tokenization (Friendtech tokenized communities and personalities while Farcaster benefited greatly from DEGEN and Frames).
Loss-versus-rebalancing (LVR) is arguably Ethereum DeFi’s biggest problem, and thus reducing LVR is fundamental to the success of Ethereum. Dynamic fee policies are an effective tool to more accurately charge arbitrageurs for accessing liquidity in AMMs.
Between ex-ante and ex-post auction designs, we expect ex-post auctions to gain more adoption. CoW AMM is the current leader, with Angstrom going live sometime this year.
WisdomTree has gotten FCA approval to list bitcoin and ether ETPs on the London Stock Exchange, the company said Wednesday.
Uniswap Labs said it’s ready to fight back if the SEC takes the crypto firm to court.
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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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In this report, each analyst on the Blockworks Research team lays out their highest conviction thesis for 2025.