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🟣 Abstraction or distraction?
Markets look weak but we’re in it for the tech
Macauley Peterson
May 08, 2024
Welcome back to 0xResearch – quick hitting alpha for the crypto degens. Here's what we got for you today:
BTC flows in fits and starts
Ethereum’s account abstraction roadmap
Degens go on Safari
Solana MEV rising
Last Friday and Monday demonstrated that capital flows in GBTC can still go both ways, as the Grayscale ETF notched its first and second days of net inflows since its conversion to an ETF.
That helped propel the ETFs as a whole to their best performing inflow days in weeks. But the winning streak was broken Tuesday; only Fidelity, Ark Invest and Invesco Galaxy were net buyers — a trickle at that — and GBTC was back in the red.
The choppiness of the ETF flows lines up almost perfectly with what we’re seeing in the spot market — intermittent pumps, growing weaker over time, and the formation of a clear daily downtrend over the past 30 days.
Improving the Improvement Proposal
On Tuesday, Vitalik Buterin dropped a new Ethereum Improvement Proposal that builds upon and evolves the ideas from EIP-3074 and EIP-4337.
The goal of the new EIP-7702 is to address shortcomings in EIP-3074 which were already slated for the next hard fork, and provide a forward-compatible, efficient and secure mechanism to enhance the functionalities of EOAs — the basic account or wallet that we all know and (to varying degrees) love.
The Ethereum community broadly recognizes that a fully smart contract-based account system is the future, but has hitherto been slow to build consensus around the optimal path.
7702 has rallied support from 3074 proponents like core developers Lightclient and Andrew Ashkhmin, as well as important dapp developers including Uniswap’s Hayden Adams.
In based gamified DeFi news, Superform, the team behind the 4626 Alliance — another Ethereum standard for tokenized vaults — is launching “Safari,” its spin on a points and incentives scheme.
Starting tomorrow, “anyone who deposits through Superform and holds SuperPositions [ERC-1155 tokenized representations of yield positions minted through Superform] will earn XP,” according to the group’s blog post.
In six “tournaments” over a six-month long “season one,” participants can rack up XP and use it to mint NFTs on Base that give them a boost in subsequent tournaments.
What the ultimate point of racing to gather XP is, we can only guess. A “disclaimer” stipulates that “SuperFrens NFTs & Superform XP give holders no current or future economic or governance rights.”
But we’ve heard that before.
Synthetix composable leverage is live on Base. Provide USDC liquidity and earn fees and incentives from perps traders.
Solana MEV:
BWR’s Dan Smith defines "total economic value" as total transaction fees plus captured MEV returned to validators. He finds that Ethereum on Monday raked in about $3.16 million compared to Solana’s $2.80 million.
However, he concludes, “Solana will flip Ethereum in transaction fees + captured MEV this month, maybe even this week.”
Kamino Finance emerges as the preeminent money market on Solana, offering leading products for lending, borrowing and liquidity provision. With over $1B in deposits, Kamino has flippened the incumbent competitors. The KMNO token launched on April 30, airdropping 7.5% of the token supply to users. In spite of an underwhelming TGE, a high KMNO stakerate coupled with the ongoing growth in deposits suggests continued success for the protocol.
With the spot BTC ETF behind us, the market can now turn its attention to a potential US spot ETH ETF approval/denial on May 23 while Hong Kong’s first ETH ETF has started trading. April marked the first full month post the Dencun upgrade leading to a 90%+ reduction in L2 fees. Demand for restaking protocols continued strong with EigenLayer hitting $16B in TVL. However, ETH saw an 18% drawdown MoM alongside a downturn in the wider stock, bond and crypto markets.
Some creditors could see up to 142% of their claims paid back.
Solana’s validators made almost $7 million in tips last week.
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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.
