Chart of the Week
Don't Dig for Gold, Sell Shovels
The above chart shows massive growth.
But what's it tracking? And why should you care about it?
It tracks the number of tokens launched on Clanker. And it's showing massive growth. From just ~1k daily launches in late January, it's reaching ~50k launches today.
(Clanker is a token that rewards its creators. You can read more details here.)
Why should you care? Cuz it explains the >4x increase in $BNKR price in the last two weeks. We should find explanations for such outperformance during the current bearish market conditions.
What's Happening? $BNKR is outperforming due to the latest iteration of the"AI Agent narrative". But first, lemme back up to give the context.
Since January, Tech Twitter has been raving about Claude Code. There was a notable increase in the effectiveness of vibe coding. Then a developer named Peter Steinberger released Clawdbot.
Clawdbot is an open-source framework that allows users to create AI agents that can be messaged via Telegram or WhatsApp. This allowed AI Agents to act as real personal assistants. This improved the workflows of many people.
(Btw, Clawdbot renamed itself two times. First time into Moltbot. Now, it's known as OpenClaw.)
So far, so good. But, crypto has nothing to do with any of this yet. In fact, the founder, Peter Steinberger, wasn't a fan of crypto at all.
Enter Bankr. It calls itself the infrastructure layer for self-sustaining AI agents. You can read more about it here. For our purposes, we can understand it as a simple token launchpad for AI Agents.
On January 23, Bankr released an update that allows agent builders to give their agents their own Bankr wallet. Devs started going crazy with it. For example, there were agents placing bets on Polymarket.
Most importantly, Bankr allowed each agent to launch a token for itself. Since these Clanker tokens gave the trading fees to their creators, token launches became a revenue source for agents.
This created a gold rush. Everyone was chasing after the high-risk Agent tokens for that fast 10x. I do not want to list individual ones because these are high-risk projects that will crash.
The trick to making money during a gold rush is sell shovels.
That's what happened with Bankruptcy. It was selling shovels, aka token-launchpad, for agents digging for gold, aka Agent tokens.
This is a very high-risk, short-term narrative. So, I'm not personally participating in it. Even though the chart is going up for now, it can die down any day from now.
The lesson here is that it's better to be the casino than be a gambler. It's better to be Pump.fun than a memecoin. It's better to buy $BNKR than some high-risk agent token.
Sponsored Deep Dive
Katana: The DeFi-Optimized Chain
Most L2s just became worthless. (Sorta.)
Last week, Vitalik announced a pivot in Ethereum's L2 strategy. TLDR: he said generic L2s without any specialization are useless. Every chain should
Katana always knew this. That's why they're the first L2 chain optimized for DeFi.
(Btw, Katana is a chain incubated by Polygon Labs and the quant trading firm GSR. While Conduit manages its core infrastructure, Succinct Labs does its ZK magic. All of them are A+ players with high credibility.)
So, let's look at why this chain is the best for DeFi.
Katana: The DeFi Chain
While other chains tried to appeal to everyone, Katana was purely focused on DeFi.
Below are common challenges of DeFi ecosystems:
- Liquidity is fragmented across chains and protocols
- Unsustainable emissions that only attract mercenary capital
- Unproductive collateral that doesn't generate any value for the ecosystem
Katana addresses them by incentivizing deep liquidity and sustainable high yield. It has optimized its architecture to deliver exactly that.
Firstly, let me explain how Katana drives maximum yield to its users.
In other ecosystems, the chain keeps the revenue for itself. For example, the gas fee on the Base chain goes to Coinbase. Nobody else has any claim over it.
In Katana, all the revenue generated by the chain is used to incentivize DeFi.
They also have new innovative revenue sources.
Here's a list of existing yield sources on Katana:
- AUSD is the preferred stablecoin on Katana. It can generate a treasury yield that the chain can productively deploy.
- Sequencer fees. These are the gas fees of L2 chains. While other chains like Base keep it for themselves, Katana uses it create "Chain-Owned Liquidity".
- VaultBridge is a special type of L2 bridge that generates revenue.
In traditional L2s, whenever a user bridges an asset to it, those assets are left idling in the L2-bridge. VaultBridge deposits qualified bridged assets into farms and earns yield. Right now, it's powered by Morpho and uses Gauntlet and Steakhouse Financial to generate yield.
- Chain-Owned Liquidity (CoL) refers to liquidity that is directly owned by Katana. Revenue from sequencer fees is used to build the CoL.
This will become a compounding base of liquidity that can support all sorts of activities on the chain, from trading to yield generation. It has several benefits, like providing market stability.
It'll also generate revenue by itself.
Katana redirects these revenues to increase the yield on its ecosystem.
To get deep liquidity, they're also kingmaking a few apps to avoid fragmentation of liquidity across multiple protocols. They've also allocated 10% of the total $KAT supply to these protocols for incentives.
- For decentralized exchange, aka spot trading, they've chosen Sushi.
- Morpho is their chosen candidate for decentralized lending & borrowing.
- They've promoted Yearn as the go-to platform for Yield Aggregation.
- They will be working with a team to launch a Perp DEX in the near future.
This architecture is the foundation for Katana's sustainable flywheel
- Deep liquidity leads to higher activity
- High activity leads to more fees
- More fees lead to higher yields
- High yield leads to deeper liquidity
- And so on
Tokenomics
$KAT is the native token of Katana.
But it isn't a traditional governance token. It doesn't govern the chain upgrade or even used as the gas token (it's $ETH). In the future, if/when they decentralize the Katana sequencer, it might get such utilities. Katana, through KAT, is the first chain to enable veTokenomics at the chain level.
$KAT was inspired by the ve(3,3) mechanism. Here's how it works:
- $KAT holders can stake it to receive vKAT
- vKAT holders participate in weekly voting cycles
- The weekly voting will decide where the KAT incentives will go
- Voters earn a portion of the fees generated by the protocol pools they support.h
This aligns different stakeholders. Katana app users will receive incentives, $vKAT voters will receive part of the fees, and it adds value to $KAT as well. The chain, holders, protocols, and users are all aligned.
$KAT is the native token of the chain. Since Katana hasn't raised any money from VCs, it has a really good token distribution.
The Katana App
A vibrant DeFi ecosystem is great.
But that's not enough. In most chains, it's hard to find good farms and assets.
Not in Katana. They've released a new app. (It's only v1 for now, but better versions will be here in the coming months.)
Katana App is designed to be your single DeFi command center.
- Monitor your portfolio
- Find top tokens and farms
- More features like staking and quests will come soon as well.
Plus, as you can see in the image above, the Katana ecosystem is offering very high yield. For example, APY on USDC is ~42%. This is very lucrative.
To recap, if you want to explore the most DeFi-optimized ecosystem, check out Katana. It's built from the ground up to fix the broken mechanics of DeFi.
In the coming months, Katana will become the all-in-one DeFi chain and the all-in-one DeFi app.
🚀 DeFi Catalysts
MegaETH opened its mainnet for the public. While it had a lot of hype, the TVL on the chain is only $40M as of writing.
Ethereum Name Service had planned to launch a rollup of its own. Now, they seem to stay on the Ethereum L1 itself.
Sushiswap has integrated Solana into its aggregator. This expansion is powered by the Ultra API from Jupiter.
Backpack is an all-in-one crypto wallet and exchange. It has announced the token distribution of its upcoming coin.
Coinglass says that exchange data shows capital is returning, but leverage is not. This means people are returning, but cautiously.
Tempo gave a detailed explanation of stablecoin fees on its chain. It'll enable paying transaction fees in any stablecoin, including custom-issued tokens and tokenized deposits.
📰 Industry News
Coinbase aired an ad during Super Bowl LX on February 8. The public reception to it was leaning negative, indicating crypto's worsening image.
Kalshi has partnered with Sleeper to add prediction market features to the platform. It'll bring Kalshi markets to 10 million more people.
China has banned domestic entities from issuing digital tokens overseas and has banned the offshore issuance of yuan-linked stablecoins without approval.
Tether helped Turkish authorities with a money laundering investigation by freezing over half a billion dollars in crypto.
SBF is accusing Biden's administration of political warfare against him. Most are seeing this as part of SBF's desperate attempt to get a pardon.
🐦⬛ X Hits
- What is delta-neutral?
- We're in a pivotal moment in history.
- Cost as a wedge for winning TradLending.
😂 Meme
Until next time,
Edgy
Today's email was written by Edgy and Yayya.
DISCLAIMER: I'm NOT a financial advisor. This content is for education and information purposes only. Crypto and DeFi are risky and speculative. Please do your research before investing.
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