🟣 Arbitrum bets big on gaming

_{Brought to you by:}

Welcome back to 0xResearch. Here's what we’ve got for you today:

• Arbitrum bets big on gaming

• Friend.tech finds a new friend

• New Era for European Stablecoins

• Adding a little ETH goes a long way

• RSVP: Avalanche X/Twitter Space

Arbitrum Goes Big on Gaming

The Arbitrum DAO just greenlit a massive $215 million investment in gaming projects over the next three years! This ambitious initiative, called the Gaming Catalyst Program (GCP), aims to make Arbitrum the go-to platform for blockchain gaming.

Here's the lowdown:

• The Goal: Boost awareness and adoption of Arbitrum in the gaming world, encouraging developers and players to flock to the platform.

• The Money: A whopping 225 million ARB tokens (~$215M) will be distributed through grants, investments, and bounties. Individual projects could receive up to 500k ARB (~$484K) in funding.

• The Players: The proposal passed with strong support from key players like L2Beat, Wintermute, and Treasure DAO. However, some notable organizations, like Camelot DAO and (yours truly) Blockworks Research, opposed it.

• The Controversy: Some critics worry about the high operating costs (up to $25M) and the potential lack of oversight for such a large sum of money.

Bottom Line: This is a bold move by Arbitrum to become a major player in the booming blockchain gaming space. Whether it pays off remains to be seen, but it's definitely a development worth watching!

Friend.tech Unfriends Base

Friend.tech, the decentralized social media platform, has announced a significant shift in its infrastructure. It is moving away from Coinbase's Ethereum Layer-2 network, Base, to its own newly developed blockchain called Friendchain. This move has been met with mixed reactions from users, with some expressing confusion and others excitement about the potential benefits.

The decision to create Friendchain was driven by Friend.tech's desire for greater control over its technology stack and user experience. By having its own blockchain, the platform can tailor optimizations and experiment with new features more quickly. It also allows for the use of their native token, FRIEND, as a gas token, introducing a new economic dynamic to the platform.

The transition to Friendchain is a significant development for Friend.tech and the wider decentralized social media landscape. It remains to be seen how this move will impact the platform's user base and overall success, but it certainly marks a bold step towards greater autonomy and innovation in the SocialFi space.

MiCA: New Era for European Crypto

Europe is set to implement new crypto regulations, known as MiCA, on June 30th. These regulations primarily target stablecoin issuers, requiring them to comply with stricter disclosure and operational standards. While the overall goal is to bring more stability and trust to the crypto market, there are concerns about how this will affect the dominance of US dollar-pegged stablecoins like Tether (USDT) and USD Coin (USDC), which account for nearly 90% of the market.

Key points:

• MiCA's impact on stablecoins: The regulations require stablecoins to be backed 1:1 with a liquid reserve and only issued by regulated entities like banks or e-money institutions. This could potentially challenge the status of leading stablecoins if they fail to meet these requirements.

• Industry players' response: Major exchanges like Binance and Kraken are adapting to the new rules by restricting access to certain stablecoins. Binance is also working towards compliance but hasn't specified which coins will be affected.

• Tether and Circle's stance: Tether has expressed concerns about some of MiCA's requirements, while Circle is actively working to obtain the necessary license to comply.

• Euro-backed stablecoins: While the dominance of US dollar-pegged stablecoins is significant, there is a small but growing market for euro-backed stablecoins, which currently account for 1.1% of all transactions.

Overall, the implementation of MiCA is a significant development for the crypto industry in Europe. While the regulations aim to enhance stability and consumer protection, the full impact on the market, especially the dominance of US dollar-pegged stablecoins, remains to be seen.

— Marc Arjoon (X: @marcarjoon | Farcaster: @marcarjoon)

Brought to you by:

After the success of last year's Hackathon, we're running it back, but bigger and better!

We're getting the kitchen together and letting the devs do their thing, cook.

Spots are limited, so secure yours now!

Adding a little ETH goes a long way

ETH continues to enhance the risk-adjusted performance of investment portfolios. The Sharpe ratio is a measure of risk-adjusted return that helps investors assess the performance of an investment compared to its risk. Adding 5% ETH to a traditional 60/40 portfolio would have pushed the Sharpe ratio above 2.0 in June.

Today at 12 pm ET, Blockworks Research is hosting an X Space in conjunction with Avalanche to discuss the network’s latest proposal on subnets.

Avalanche Community Proposal 77 (ACP-77) introduces a new type of validator, or "Subnet Validators," that lowers the barriers to entry to launch a dedicated blockchain by reducing both hardware requirements on subnet validators and upfront costs to register a BLS signature with the P-Chain for AWM interoperability.

Set your reminders and join in via this link.

Avalanche: An Economic Analysis of ACP-77

Avalanche has introduced proposal ACP-77, which would drastically lower the barriers to entry to launch a dedicated blockchain while imposing a continuous fee mechanism that subnets would pay to the P-Chain. By performing a scenario analysis of different dedicated blockchain solutions, we conclude that ACP77 would hypothetically make Avalanche subnets as cost-effective as Celestia-based rollups while providing additional liveness guarantees and native interoperability.

Read more →

Polygon Protocol Governance Call (PPGC) #20

This month's PPGC mainly focused on discussing PIP-37: Ahmedabad Hard Fork and the PIPs included with it. PIP-36, PIP-30, and PIP-35 included alongside PIP-37, were also discussed in the last PPGC notes. The only notable change since then has been the adoption of EIP-7702 over EIP-3074, with regard to PIP-22. Both are related to account abstraction, while EIP-7702 was proposed by Vitalik to eliminate vulnerabilities and ensure forward compatibility by improving upon EIP-3074.

Read more → 

What do memecoins and meme stocks have in common?

Doesn’t it sound familiar that a space intended to help the financially disenfranchised ended up in a giant, messy massive money grab?

Read more →

Empire Newsletter: How the US has impacted crypto innovation

Bitcoin has made money unstoppable — blockchain really wants to do the same for social media.

Read more →

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.