Protocol Updates
Ethereum's Next Major Upgrade: Dencun
Ethereum's leveling up again.
On Wednesday, they're releasing the Dencun Upgrade.
What's New? The upgrade includes something called "proto-danksharding" or "EIP-4844." It will make transactions faster and more affordable through a mechanism called Blobspace.
This aims to reduce the transaction costs for Layer 2 rollups.
Blobspace will make rollups 10x better
After the upgrade, rollups will use these blobs to post data on Ethereum.
Using blobs can reduce transaction fees on rollups by up to ~98%. You can calculate how much fees will be reduced on this website.
Cheap prices will attract more users to rollups. This, in turn, will boost transactions, total value locked, and other metrics.
And it will have other knock-on effects as well. If the gas fee reaches near-zero, many rollups can offer free transactions. This will lead to novel business models such as gas-free transactions on rollups.
How can you benefit from this upgrade?
Rollups, like any other business, have revenues and costs. The revenues are the fees paid by users to rollups. The costs are the $ETH paid by the rollups to Ethereum.
With the Dencun upgrade, costs will nosedive. And the profitability of rollups will likely rise.
Theoretically, governance tokens of rollups have a claim on these profits. So, the best way to profit from the Dencun upgrade is to long rollup tokens such as $OP and $ARB.
Another way to gain exposure is through $ETH. It has been pumping over the last few weeks. It has gone from $3k to $4k in the last three weeks alone.
The Dencun upgrade is a top catalyst for this pump, but other factors include the bullish crypto environment, ETH ETF speculations, and so on.
In the previous cycle, ETH's gas costs soared. This attracted people to the Solunavax narrative and other Alt-Layer 1s. What's different about this cycle is that Layer 2s are here, and they're increasing in usage.
Alt L1s are still relevant, especially chains like Solana and Binance Smart Chain.
With its lower costs, we'll see if Dencun gives an edge to the Layer 2 rollups.
The DeFi Edge Product
The Fastest Way to Catch Up in the Bull
The bull's here.
If you're feeling slightly underprepared for it, you have a chance to "catch up." Bull markets only come once every few years, and you want every edge you can get.
Double Your DeFi is a five-week, comprehensive program designed to teach you my DeFi investing systems. This is an A to Z system. Everything from finding gems, evaluating tokens, how to take profits, defi yield strategies, and more.
This is designed for people who want to improve their systems, and stop relying on other people's "picks."
The next cohort starts in 3 weeks.
We have made a few improvements to give you the most bang for your buck.
- An Exclusive Airdrop Masterclass. Patrick will conduct A-Z on how to play airdrops. From discovering potential 5-figures airdrops to farm them with multiple wallets without risking being flagged as a Sybil attacker.
- Introducing the Airdrop Dashboard. The most complete, current, and step-by-step dashboard is designed to give you a hub to track every airdrop you want to farm. 2024 is the airdrop season, and we're giving you the system to reap all the rewards with 0 effort.
- *New Module* DeFi Yield Strategies. We'll explore various DeFi yield opportunities we're seeing, from beginner-friendly ones to more advanced strategies.
- *New Playbooks*. Taking profits and cutting losses, and trading psychology.
If you're feeling unprepared for the bull market, this is like a hyperbolic time chamber that'll get you up to speed.
This is the final Double Your DeFi. So if you've been on the fence about joining, this will be your last opportunity.
How-to
Common Bull Market Mistakes to Avoid
Avoiding stupidity is easier than seeking brilliance - Charlie Munger
Here's something interesting I've observed in past cycles...it's not that hard to make money in a bull cycle, but it isn't easy to KEEP money at the end of the cycle.
Have you ever noticed this? Everyone brags about their ATH paper gain portfolios, but they tend not to have anything at the end of it.
All because of a few key mistakes. So instead of focusing on 200 IQ moves, just focus on avoiding the typical mistakes people make. And you'll end the cycle far wealthier.
#1 Not taking profits
"Just 3 more months of this, and I'm set for life"
No one cares about what your ATH portfolio is. It's just numbers on a screen. You have to take profits, or you'll give them back to the markets.
Don't know how? I got you! Below is an example of a profit-taking system. You'll have to adjust it to your risk tolerance.
No one cares about your ATH portfolio – what matters is what you have left at the end of the cycle.
#2 Not thinking like retail
In the bull market, pumps are powered by retail. But they don't think like crypto natives. They won't care about ve(3,3) or other galaxy brain stuff.
There are two solutions:
First, spend time on TikTok, Instagram, Reddit, and YouTube. Read the comments. To understand normies, you must spend time with normies.
Second, focus more on pumpamentals than fundamentals. You should look for projects that:
- Can attract attention, and
- Have a simple-to-understand story. People should be able to easily explain why the future price will pump.
The following image will help you evaluate those two factors.
#3 Fading momentum
By the time you are ready to invest, the coin might have already pumped 100%. Naturally, this will feel expensive for you.
You might want to wait for a correction to happen. But, that is a mistake.
In bull markets, increasing prices generate momentum. Increasing prices lead to more people discovering the coin and investing in it. And so, you'll helplessly watch the coin 10x.
The solution is to reassess the risk and reward at the price point that is now available to you. Don't wait for a correction. If there's a good chance that the coin will pump even further, then enter the position.
If you're unsure, just allocate a small position to the token. Then, if your position dips, there isn't too much damage. And if it pumps, you won't feel left out.
#4 Too much diversification
I've seen people post portfolios before that contained 25+ coins. But this is a mistake. Why? Because:
- You can't keep up with that many projects.
- If a coin does moon, you won't reap as many rewards.
I find the sweet spot is between 5-7 projects. Here's a template for a such a portfolio:
- Long-term: BTC, ETH, and/or SOL.
- Narrative 1: An alpha and beta play
- Narrative 2: An alpha and beta play
- Narrative 3: An alpha and beta play
#5 Trying to make it this cycle
Here's a common tragedy:
- You have guys that make 10x.
- They feel like they're underperforming.
- They LOSE IT trying to chase 50x – "just three more months, and I'm set!"
- They end up with $0.
This is the result of unrealistic goals. And these goals often come from comparing yourself to X larps. X is a fake reality created by survivorship bias and photoshop genies.
The above are just five mistakes to avoid. There are ten more traps that you should also be aware of. Read my thread to learn about those as well.
🪂 Airdrop Alpha
Vector Reserve introduced vPoints. It will aggregate EigenLayer points as well as points from multiple LRT protocols.
Aether, an EVM consumer chain, announced that it will airdrop 40% of its supply to $ATOM holders.
Aigisos, a security-focused Dymension RollApp, is allocating 12% of $AIG supply to $DYM stakers.
NIM Network, a gaming-focused Dymension RollApp, has allocated 9% of $NIM for genesis Rolldrop. Some of it will probably go to $DYM stakers.
Saga is airdropping their tokens to stakers from many communities including Celestia, Polygon, Avalanche, and Cosmos.
Metis introduced MarchDrop, their program for rewarding onchain activities. Joining early will give you more points.
Wormhole has released the tool to check airdrop eligibility. Earlier, some eligible users weren't shown their allocation. It is fixed now.
Venum Network has released the final testnet airdrop task before their mainnet launch.
Frax Finance took a snapshot of veFXS holders for FXTL points on March 7th. They will take the next snapshot on April 3rd.
📰 Industry News
SEC has delayed the decision on two proposed spot Ethereum ETFs from Fidelity and BlackRock. They have sought public feedback.
Ethereum Name Service is discussing expanding to the Solana ecosystem. This is a good opportunity since Solana doesn't have a good native naming system.
Starkware introduced Stwo, their next-gen Circle-STARK-based prover. This was a result of joint research with Polygon Labs.
BlackRock's Bitcoin ETF has accumulated nearly 200k $BTC. It has overtaken the holding of Michael Saylor's MicroStrategy in two months.
😂 Meme
Until next time,
Edgy
p.s. Now that we're in the full-on bull - you might start seeing newsletters twice a week on Mondays and Thursdays. Too much action going on for just once a week!
p.p.s. What did you think of this week's newsletter? Hook us up with some feedback here.
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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