The markets are choppy. People are getting shaken out. And some have declared that the bull is over. I don't have a crystal ball. I just make probability bets. What gets me excited? Bitcoin halvening. ETH ETF possibly. Biden predicts the Fed will cut rates this year. Blackrock starting an RWA tokenization network on ETF. And much more. So, see this as an opportunity for discounts, and a chance to breathe.
Here's what we got today:
Bridges 101. How to move funds across chains?
The privacy narrative. Basic introduction + top projects
Around the web. Jupiter introduced JupSOL, EigenLayer removed the LST cap, Maverick introduced Programmable Pools, and more.
Here's your Edge 🗡️!
Guides
Bridging Your Crypto 101
DeFi just to be so simple. But now we're living in a multi-chain world. Say you have some capital on Solana, but you want to "move" it over to a hot layer 2 on Ethereum. You could do it with a centralized exchange, but man is it awkward. The simplest way to move around in this multichain world is through Bridging. It's pretty simple and safe to use these days. (I can't stress how good you guys have it now. When I started bridging funds years ago, I had to pray for 30 minutes hoping my money arrived) And on top of that, some of them have points program towards an airdrop. I hate airdrop "farming," but I love getting points for things I'm doing anyways. What makes a great bridge? Here's what I think about.
Cost. Will this break the bank?
Speed. How long to complete the transaction?
Security. How secure is the bridge? Will I get hacked?
Supported chains. Your favorite chain might not be supported by all bridges.
Supported assets. Some bridges won't support all assets of a chain.
UX / UI. Some are so much nicer to use than others.
Additional incentives like airdrop points.
All the above criteria are straightforward, except for the security. Here's a post to understand the different security assumptions of different bridges. Here are some recommendations.
DeBridge recently launched a points program. So, this bridge has been getting a lot of attention on crypto X.
It allows you to transfer native assets between protocols. (If $BTC on Bitcoin is a native asset, $wBTC on Ethereum is a wrapped asset). It doesn't use traditional liquidity pools, but they do use its own off-chain liquidity. In the future, delegators will be able to stake liquidity to validators of deBridge as well.
For more technical information, read their documentation.
As of now, it only supports 12 blockchains. When compared to other chains, it is not a lot. But it is relatively faster than others. And it covers all the major chains.
So, people are using it a lot to farm airdrop. Theoretically, users should earn 100 points for every $1 spent.
The program was launched only recently. That means less competition. So, you have a higher chance of getting a higher % share of potential airdrop.
So, if you are going to bridge between any major chains, just use deBridge. It is basically free money on the floor.
RocketX is trying to be the one-stop shop for crypto trading.
Technically, it isn't a bridge. It is an aggregator. But other aggregators only usually allow swaps within a single chain.
With RocketX, you can swap any token on one chain to any other token on another chain. They have already connected to over 138 networks. So practically it is the best bridge for users.
Like all aggregators, it uses onchain liquidity. However, its key feature is that it aggregates liquidity from CEXes as well.
This deep liquidity allows them to provide the best prices.
Source: RocketX Vision paper
But they do charge a small fee. But if you HODL their $RVF token, you can reduce it up to 100%.
If you want a simple UI to cross chains, I'd recommend RocketX.
Connext has two things going for it. First is the traditional bridge UI. With it, you can exchange assets on one chain for assets on another chain. I like the UI / UX - it's really hard to mess up using it. Secondly, Connext will allow devs to build cross chain apps (xApps) that interact with multiple chains simultaneously. As usual, studying their documentation is the best strategy to understand its technical aspects. Here are some ideas people have already started working on using the Connext
Lock-and-mint or burn-and-mint token bridging.
Executing outcomes of DAO votes across chains.
Crosschain vault zaps and vault strategy mapping.
And more.
Their numbers also back up their dominance. It has >$755 million as TVL. In Contrast, the TVL of many of its competitors is relatively low. TVL of Stargate is around ~$325M. Across is ~$122M. Synapse is ~$104M. And the rest of them are below $100 million.
I can keep on listing different bridges. But that's not really helpful. There are too many of them.
So, here's a tool to find a bridge between the chains you want. You just pick the chain you want to bridge to and it'll show you available bridges. Alright, happy bridging! (Note some of the links above are referral links. But I would've recommended them regardless because they're quality).
Narratives
Privacy: The Achilles Heel of the Crypto Space
Blockchains are inherently transparent.
This is great for many things. Gigabrains can read Dune charts, Degens can watch whale wallets, ZachXBT can track the funds of scammers, and so on.
But it is also a huge roadblock to crypto adoption. Can you imagine all of your financial transactions being publicly available for anyone to look at? Well… that's exactly what happens in crypto.
With crypto, analysts can link your identity to your transaction history. This level of openness will lead to unwanted exposure. This isn't just a personal privacy issue. It's an issue of physical safety as well.
Thankfully, we know this is a pain point. So, smart people are working on it.
And there are multiple technical ways to approach this problem:
Privacy-focused blockchains. These are blockchains like Ethereum and Solana that try to enable privacy at the chain level. Monero and Zcash are examples.
Mixing and tumbling services: These services obscure the links between a user's old and new addresses by mixing their transactions with the transactions of others. It gives privacy by complicating the traceability of funds. Tornado Cash is a well-known example
Zero-Knowledge Proofs (ZKPs): ZKPs allow one party to prove to another that a statement is true without revealing information beyond the validity of the statement. Cryptocurrencies that use ZKP technology are able to confirm transactions without revealing details about the transactions themselves.
Stealth addresses: These are one-time addresses used for individual transactions. Only the sender and the recipient know about the transaction, which enhances privacy.
Ring Signatures: This approach mixes a user's account keys with public keys from the blockchain, making it difficult to identify the user behind each transaction.
While we are experimenting with many technologies, we have yet to gain enough adoption. As of now, mixing services are the most popular solution. If we look at DefiLlama, the top privacy protocol is a mixing service with >$440 million in TVL. The second privacy protocol only has ~$30 million in TVL.
However, I don't think mixing services is the endgame for onchain privacy. They are just a temporary solution.
Top Privacy Projects
There are several projects at the forefront of solving the privacy dilemma in the crypto space. Here are just a few of them:
Tornado Cash ($TORN): It is impossible to talk about onchain privacy without mentioning Tornado. It is the leading mixing service. It has >$440 million in TVL. It has kinda become a huge legal target. Tornado cash developer Roman Storm was arrested last year over his work with the protocol.
Aztec: It is a privacy-focused Ethereum L2. It uses the Zk-magic to enable privacy. However, it doesn't use EVM's Solidity as the smart language. It uses Noir. So, it might take some time for a full DeFi ecosystem to develop.
As of now, they don't have a token for you to invest. However, farming it for airdrops will be a good strategy.
Monero (XMR): Monero is perhaps the best-known privacy-centric cryptocurrency. It is a Layer1 blockchain that uses ring signatures and stealth addresses to obscure the origins, amounts, and destinations of all transactions.
Railgun ($RAIL): With this, you can use any DeFi app privately. There is no bridge, no isolated chain or liquidity, or similar. Just create a private Railgun account and transfer funds to it. Then you can use DeFi with your private account.
Recently, Vitalik transferred 100 $ETH to Railgun. He has been using it pretty much every month. So it is starting to get some attention.
As of now, its market cap is around ~$60 million. Compared to Monero's ~$2.15 billion, there's a lot of room for Railgun to pump.
Oasis Network (ROSE). It is a privacy-enabled L1. It differentiated itself by separating consensus and execution layers, which gave them scalability and flexibility.
Their Oasis Privacy Layer (OPL) is making waves. With OPL, all dApps on EVM chains can add privacy to their apps. As of now, ROSE has ~$609 million in Market Cap.
These projects are just the tip of the privacy iceberg. Some other interesting ones include Secret Network and Silent Protocol. I don't really look at Privacy from an "investment" perspective, but rather a cool technology that I want to use more.
🚀 DeFi Catalysts
Jupiter Exchange introduced JupSOL, a $SOL LST. It'll have 0% fees and 100% MEV kickback. Currently, an additional 100K SOL is delegated to increase the yield on JupSOL.
Fetch.ai is combining with SingularityNET and Ocean Protocol to create the Superintelligence Alliance. The merger will combine $FET, $AGIX, and $OCEAN into $ASI.
IndexCoop decided to launch a suite of automated leverage tokens on Arbitrum. The tokens included inverse and direct leverage options for ETH and BTC.
TON introduced Memelandia, a central hub for memecoins. It promises ranked TOL leaderboard, marketing support, and financial rewards.
GMX introduced Single-Token Pools. They started with $BTC & $ETH pools on Arbitrum. Theoretically, this should attract additional liquidity.
🪂 Airdrop Alpha
Wasabi Protocol, an NFT perps-based protocol on Blast, started its points program.
Soarchain has announced an airdrop for the stakers of $ATOM & $TIA among others. 2.7% of the total supply is allocated to this.
Saga introduced Power-Level Over 9000! They promised token & NFT drops from over 100+ projects across web3.
Drift introduced its token and announced a 100M $DRIFT (10% of the supply) airdrop to long-standing traders (OGs) and participants in the Trader Points program.
Blitz, an order book DEX built on Blast, launched their points program. Over 350M Blitz Points have already been distributed.
📰 Industry News
EigenLayer has removed the cap for the Liquid Staking Tokens. It's still not clear whether this is a temporary removal or not.
Lido Finance's Simple DVT module is here. This will add 72 new node operators to Lido. This is a step in the direction of decentralizing the Lido validator set.
Maverick Protocol introduced Programmable Pools. It'll allow devs to create new liquidity solutions on top of Maverick AMM. Potential applications include adding AI to the loop.
OKX launched the public mainnet of X Layer, an Ethereum-L2 that uses the Polygon Chain Development Kit.
Kraken released its own self-custodial wallet. It'll be the first open-source wallet released by a major CEX.
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. A Few Ways I Can Help You Win:
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