Literally Down Only

Solana goes down and Dymension cannot reached consensus

A big GM to my newsletter enjoyers.

It’s a BM (bad morning) for the Solana community, with the network having gone down this morning between 4-5am ET. A cluster restart was initiated at around 7am ET, which can be tracked here, whereby the network will resume production from slot 246464041 once 80% of stake has restarted. Developers do not seem to be sure what caused the outage as of this writing. Not great.

It’s as if this technology is incredibly novel and things are going to go wrong sometimes, like when Base suffered a block production stall in September 2023, or when Arbitrum experienced a partial outage due to sequencer issues in December 2023. Oh, and Dymension, which is aiming to be the settlement layer for the “internet of rollups”, cannot reach consensus upon its mainnet launch.

The bottom line is that blockchains are still a WIP, and if things weren’t going wrong from time-to-time that’d probably mean we weren’t progressing forward via experimentation.

In other news, the Quantum Cats ordinal mint sold out in just a few minutes yesterday evening once the collection was open to the public following the whitelist phase. The mint price was a hefty 0.10 BTC, or ~$4,200, so it's impressive that there was so much demand at that price point.

Quantum Cats are attempting to rally the Bitcoin community to support OP_CAT, an old Bitcoin opcode that was removed by Satoshi Nakamoto in 2010 to prevent network spam. However, with the introduction of Taproot in 2021, people are starting to wonder if Satoshi’s actions were overly precautions and that it is now safe to reintroduce the opcode to Bitcoin core.

OP_CAT proponents point to advantages like post-quantum proof Bitcoin via the use of Lamport Signatures, improved infrastructure for L2 bridges on Bitcoin, or covenants as the primary reasons to revisit the inactive opcode. The Quantum Cats movement appears to be having a real impact, with the Director of Research at Blockstream, who is also the co-creator of Taproot, signaling support for OP_CAT’s return yesterday.

This has the potential to be one of the most significant upgrades in Bitcoin’s history from the perspective of what it could enable, so this is one that will be worth following closely.

That’s about all I have for today, my friends. I am officially changing the hyperlink on my name below to my Warpcast profile on Farcaster, so be sure to try out the platform if you haven’t yet and give me a follow.

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I had convinced myself to deposit into EigenLayer after doing some moon math on the potential airdrop value by comparing it to the JTO airdrop. There were roughly 10k recipients of the JTO airdrop, versus the 90k EigenLayer depositors. JTO reached an FDV of ~$4B and proved to be a ridiculously easy play in hindsight. If EigenLayer took the same tiered airdrop approach as Jito did, it seemed somewhat feasible to me that EigenLayer could reach a peak FDV 9x of JTO (EigenLayer has 9x the depositor base).

However, the caps were lifted yesterday and LSTs poured in, raising EigenLayer’s TVL from $2.15B to $3.75B overnight. I hate the narrative of restaking, and was finally ready to bend the knee. But after that level of points dilution, I just do not see this as a +EV opportunity anymore given the opportunity cost of my liquidity. As always, this is not financial advice and those sidelined with me will probably be coping in the not-so-distant future.

Speculate positioning has decreased across the board and ETH investors must now look towards the Dencun upgrade, a potential spot ETH ETF, and restaking as tailwinds.

The big news of the month was the approval of various spot BTC ETFs. However, various ETF market dynamics have resulted in muted price action with slight downside. The next major catalysts for BTC are the halving in April, as well as potential distributions to Mt. Gox creditors.

A halt of the Solana blockchain prompted the release of a software patch

Crypto prices are largely denominated in US dollars, but basing them in bitcoin often makes far more sense

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.