Opportunity
Runes Protocol: The Next Big Thing in BTCfi
The prophecy is finally here.
When we talked about BTCfi in a previous newsletter, we highlighted the launch of the Runes Protocol as a major event in the BTCfi ecosystem. The Runes launch is finally here.
It is certainly going to make waves across the ecosystem. Magic Eden is already getting ready to support it. And its pumpamentals are also really strong.
The timing of the Runes launch is perfect. It'll be launched when the BTC halving block is reached. To be specific, on block height 840,000. We are estimating that this will happen on April 20th. So, you don't have much longer to prepare.
What are Runes? Runes Protocol is created by Casey Rodarmor. Since he created the Ordinals protocol, he is kind of like the Vitalik of the BTCfi ecosystem. So, people will put their money where he says to put it.
He's "him."
The main point of Runes is its technical superiority over existing BRC-20 tokens. It has several advantages, such as:
- It is much easier to create tokens.
- It removes reliance on off-chain data.
- It can be used on BTC L2s as well.
- And technical improvements like the more efficient UTXO-based model.
Ordinals are like the NFTs of the Bitcoin ecosystem. BRC-20 tried to create fungible tokens using ordinal inscriptions, but it came with many technical flaws. The Runes Protocol creates a much better fungible token standard for the BTC ecosystem.
Once the protocol launches, there will be many opportunities will be to trade or invest in the tokens created. But that is something to discuss later.
Right now, the frenzy is around qualifying for airdrops using Runes Protocol.
Once it launches, many existing Ordinals projects will want to issue fungible tokens. And as part of that, they'll airdrop tokens to their current holders.
But farming this is likely to be much more costly and more complicated than other airdrop farms. On the bright side, due to this complexity and cost, there are far fewer airdrop farmers.
You need a Bitcoin Web3 wallet for farming these airdrops. Xverse is a commonly recommended ONE. You can use it in Magic Eden to buy ordinals.
Here are some Ordinals projects that will probably do an airdrop.:
But these aren't the only collections that'll do an airdrop. You can qualify for a lucrative airdrop by buying any Ordinal collection that'll do an airdrop. Just be aware that *all* ordinals collections won't do Runes airdrop.
Act fast tho. You don't have the luxury of time. The halving is coming soon.
Sponsored by Kelp DAO
Earn Bonus EigenLayer Points via Kelp
We've already spoken about Kelp several times.
It is the leading solution for restaking. Just deposit your native ETH into Kelp, and Kelp will give you rsETH, a Liquid Restaked Token, in return.
Your rsETH will get all the rewards: Kelp miles, staking rewards, restaking rewards, and EigenLayer points. In addition, you can tokenize EL points into $KEP tokens.
They've been super successful as well. They have already crossed $750MM in TVL. And to reach 1B in TVL, they've launched a new campaign called "Road to One Billion."
They're distributing five million extra EigenLayer points among new depositors. Key to remember: these points are on top of existing rewards like Kelp points and EL points.
- For the first 30k ETH deposits, you'll get a whopping 100 extra EL points for every ETH deposited.
- For the next 40k ETH deposits, you'll get a whopping 50 extra EL points for every ETH deposited.
They launched this program on April 2nd. And so, many will have already deposited before you. If you want those extra EL points, act fast.
Deep Dive
Ethena: Our View
Ethena launched its native token yesterday. As of this writing, the price is up 70% and well above $1.20.
The market is always searching for new, shiny yields, and it is even better when those yields are stable.
We have previously covered Ethena, but if you missed our newsletter, here is the link to read it.
When we first wrote about Ethena, its TVL was around $350MM; now, it's at $2B!
I am always on the hunt for genuine DeFi products.
A big part of being a genuine DeFi protocol is being able to generate revenue for the protocol and its users.
Ethena, as of now, offers one of the higher stable yields in the crypto space.
I don't think this is going to stop, and they are well on track to becoming one of the largest stablecoins in 2024/2025.
Where is Ethena Bridging the Gap?
Ethena's design philosophy takes a deep dive into the stablecoin trilemma.
The team achieved a great balance between decentralization, stability, and scalability.
While the crypto market has seen its fair share of stablecoins, each falling into categories such as overcollateralized, fiat-backed, or algorithmic, it has yet to balance these aspects perfectly.
Ethena's USDe, however, stands out from the crowd by offering scalability and yield potential that's hard to match, all thanks to its innovative backing mechanism.
I suggest reading our previous article here to explore the mechanism in more detail.
$ENA - The Token
What we know now is that $ENA will serve as a governance token—allowing its holders to vote in decision-making processes.
Despite having ¼ of its tokenomics allocated to investors, we do feel they have done a great job with the vesting side of $ENA.
Below are more details about it;
I could write more about the token, but this isn't the type of Alpha I wanted to share today.
Great, but is Ethena Profitable?
Believe it or not, Ethena is incredibly profitable right now.
I kid you not when I say it's probably among the most profitable dApps in crypto. By looking at this token terminal chart, you can see the giants surrounding this protocol.
How is that possible?
Ethena's revenue comes from its "take rate" on the total yield. They take a cut from your yield.
As of now, everything generated goes towards their insurance fund. But at some point, a portion of it might also be distributed among stakers of USDe.
So, let's suppose the take rate is 12%. Then the formula to calculate total yield will be:
Total Yield * (1–88% * (1 — sUSDe Supply / USDe Supply))
One point to mention
Ethena is currently undergoing its "shard campaign," which ironically lowers the profitability of the protocol.
Based on the formula above, the more USDe is used and the less it is staked, the more profitable Ethena will become.
This is definitely a protocol worth paying attention to.
🚀 DeFi Catalysts
Degen token community is launching the Degen chain. It will be an L3 that will use AnyTrust for DA and Settle on Base. It is built using Arbitrum Orbit.
Stryke, previously known as Dopex, launched the $SYK token. You can now start migrating DPX and rDPX tokens.
Velodrome is expanding to Mode Network. Mode has offered $1 million in voting incentives to boost ecosystem rewards.
Frax Finance has expanded $FRAX and $sFRAX to the Cosmos ecosystem via Noble, an appchain designed to issue native digital assets to Cosmos..
AltLayer has released staking for $ALT. It is the first step in the progressive launch of MACH Alpha, a fast finality layer.
🪂 Airdrop Alpha
Dymension stakers have a lot of airdrops coming their way. Make sure to claim all of those airdrops.
Celestia stakers, $stTIA holders, and $milkTIA will receive an airdrop from Torocoin. $TORO is a memecoin. And you have 16 days left to claim.
Wormhole's $W airdrop claim is live. The snapshot was taken on Feb 6th. And there are many eligibility criteria.
Cosmos Ecosystem is getting many airdrops. Here's a list of airdrops to claim or register in the Cosmos Ecosystem.
Pryzm's registration form for their airdrop is live. To qualify, you need to delegate your tokens to Pryzm validators while staking.
TON Foundation airdropped ~200k TON to the most active traders on DeDust and Ston.fi. The snapshot was taken on March 26th.
📰 Industry News
Sam Bankman-Fried was sentenced to 25 years in prison for defrauding crypto investors. SBF is planning to appeal the sentence.
Telegram has introduced a new system for Ad payments. Users will be able to buy ads with Toncoins, which is powered by the TON blockchain.
Clearpool expanded to Avalanche with the release of RWA-backed product, Credit Vaults. It allows borrowers to set terms like interest rates & repayment frequencies.
Maker DAO will allow users to borrow up to $100 million against USDe using Morpho Blue. They might increase the limit to $600 million.
Celestia's Blobstream is live on Base and Arbitrum. Blobstream allows devs in any ecosystem access to high-throughput blockspace powered by Celestia.
🧠 Twitter Alpha
- A collection of great articles about crypto safety.
- Investing lessons from Brian Feroldi.
- Still too early for rate cuts; the job openings increased in February.
- BTC, which was seized by the US government, is on the move.
- If you hold DAI you need to know this.
😂 Meme
Until next time,
Edgy
Today's email was written by Edgy, Yayya, and Lorenzo.
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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