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- 🟣 AKT rips on UpBit listing
🟣 AKT rips on UpBit listing
Compute DePINs could be the answer to centralized compute
Welcome back to 0xResearch – quick hitting alpha for the crypto degens. Here's what we got for you today:
BTC @ $66k and equities stabilize
AKT listing
PEPE perps
SEC lawyers resign
BTC tapped $60k on Coinbase last Friday but has roared back to $66k. ETH sits at $3200 and SOL around $160. The bounce comes on the back of a stabilization in the equity markets after a brief but healthy selloff. The Mad Lad repricing continues, but holders have made so much money they probably have enough cushion to weather the storm. The softness in NVDA and other AI-related stocks seems to have paused for now. Crypto AI things have been mixed on the equity market repricing.
Speaking of crypto x AI, Upbit, South Korea’s largest exchange, listed AKT, the native token of the Akash ecosystem, which caused the token to pump over 60% at its height.
Akash is one of my personally favorite projects in my favorite sub-sector, compute DePINs. Compute DePINs sit at a historically important intersection in technology. As you know, there’s shortage of compute as a consequence of the insatiable demand for AI accelerators, and what compute is available is highly centralized and characterized by unfavorable contract terms, favoritism by cloud providers, lengthy KYC, and high lease prices. Compute DePINs seek to solve this, leveraging latent compute capacity from consumers, professional data centers, and PoW miners. It’s a fundamentally strong story with crypto uniquely positioned to add value, and given the revenue and leasing numbers coming from projects like io.net and Akash, it seems like we’re in the early innings of this story.
Speaking of fundamentals, just days after launching WIF perps for non-US clients, Coinbase has listed PEPE perps, further legitimizing memecoin trading. The legitimacy of memecoins is the biggest story this cycle, and although we’ve seen somewhat of a pullback, more perps listings are another positive catalyst for the normalization of memecoins.
Lastly, I would be remiss if I didn’t mention the latest negative headline for the SEC vis-à -vis crypto. Yesterday, it came out that two SEC attorneys resigned after a federal judge sanctioned the agency for misconduct in a crypto case against a firm called DEBT Box. In July 2022, the SEC accused DEBT Box of defrauding investors and got the court to freeze the company's assets. However, the judge found the SEC made false statements, lacked evidence, and abused its power. The judge rescinded the asset freeze, sanctioned the SEC for "gross abuse of power," and ordered it to pay DEBT Box's legal fees. Ouch.
— ryan (X: _ryanrconnor | Farcaster: ryanconnor)
Thousands of rollups will continue to launch. With that, rollup interoperability presents a major challenge. Our latest unlocked report here unpacks how Avail presents a potential solution to rollup fragmentation through its three products: Avail DA, Nexus, and Fusion. Avail, the unification layer for web3, may prove to be the logical end game for DA layers, so if you’re interested in what that means, check the report out!
META Plaforms has acquired the most AI compute - by a lot.
Zuck is crushing it - he’s amassed the largest amount of the state of the art chips for AI training. Less than 18 months ago, everyone was faulting Mark for his Metaverse bet, but it turns out that the hardware required for AR/VR research is also ideal for generative AI training.
From a crypto perspective, this type of concentration of power adds further credence to the decentralized compute narrative we touched on above. Leading edge compute is increasingly locked up and controlled by the biggest players in tech. Projects like Akash, io.net, the Render Network and others are at the forefront of this effort. We hope to see one of these projects on a chart like this soon.
A new attempt to tackle the liquidity bootstrapping problem of perpetual exchanges is launching a two-week “Liquidity Generation Event” today.
Reya Network is a trading-optimized layer-2 using the Arbitrum Orbit tech stack and Gelato’s Rollup-as-a-Service, settling to Ethereum mainnet.
The team claims to have block times of 100ms, 30,000 transactions per second and no gas fees, which compares favorably to other trading-focused L1s like Sei and Monad (yet to launch).
Co-founder Simon Jones and around 10 developers previously launched interest rate swaps protocol Voltz, but decided it wasn’t a big enough idea.
Now, backed by Framework Ventures, Coinbase Ventures, Wintermute Ventures and Amber Group, Reya Network’s novel feature is to bake liquidity for dexes directly into the L2.
Any exchange building on Reya will tap into the same passively LP’ed pool of capital. That enables features like a single margin account across all exchanges, a capital efficiency boon for market makers.
A homegrown DEX will be the first offering, but the team is talking to “a bunch of other exchanges” that will start to launch on the network over the course of the year, Jones said.
For Reya’s spin on points incentives, users can earn “experience” (XP) by depositing USDC from Ethereum, Polygon PoS, Optimism or Arbitrum.
The protocol shares the same centralization and risk profile as other layer-2s, including a centralized sequencer and a 3-of-5 multisig controlling smart contract upgrades. Two keys are held by the Reya core team and three by “well-known and trustworthy individuals” from the community, Jones said.
Reya has undergone audits, and “months and months and months of testing,” but the usual caveats around smart contract risk and other concerns surrounding brand-new protocols apply.
Data publishing costs have historically been a bottleneck for rollups, and as more rollups launch, interoperability will continue to be a major challenge. Avail presents a potential solution to rollup fragmentation through its three products: Avail DA, Nexus, and Fusion, which together aim to unify the web3 experience.
Arweave recently launched the testnet for AO computer, a new messaging protocol that will sit atop a PoS network and aims to become a scalable global compute platform through parallel processing and modularity.
As I’ve struggled to replace basic documents like my Nigerian birth certificate, it’s only become clearer that identity should not rely on something as fragile as physical documents.
DEBT Box says they have spent nearly $750,000 fighting the SEC’s claims.
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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.
