April 10, 2024 | Read Online

Byron Gilliam

_{Brought to you by:}

"We choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard."

- John F. Kennedy

🐱 Solana Has Its CryptoKitties Moment (Because Blockchains Are Hard)

CryptoKitties is one of the (many) reasons I'm not independently wealthy — when their introduction in 2017 rendered the Ethereum blockchain unusable, I sold my ETH.

I had bought ETH because "world computer" is a great elevator pitch, but what's the point of a computer that can't process a single game's worth of cat jpegs?

My takeaway from the CryptoKitties episode was that making a world computer with shareable state (aka, a decentralized blockchain) was simply too hard.

This caused me to write off Ethereum and stop paying attention to the rest of non-bitcoin crypto — right up until Blockworks convinced me to pay attention again (by giving me this newsletter job in 2021).

In the interim, ETH went from a post-CryptoKitties low of $90 to a me-paying-attention-again-high of $4,500.

Ouch.

I like to tell myself I wasn't totally wrong to sell, however.

When I re-engaged with crypto in 2021, it often cost hundreds of dollars to transact on Ethereum, which made it seem no more usable to me than it was when I gave up on it in 2017.

Another three years on and Ethereum is still not a particularly usable blockchain — although that is now by choice.

Instead of responding to the CryptoKitties debacle by making Ethereum more user-friendly, the community chose to move most users off-chain (to layer-2s) and develop the mainchain seemingly in service of the ultrasound money meme (by keeping fees high).

That strategic decision (which I've admittedly oversimplified here) opened the door for the biggest winner of the current cycle: Solana.

Solana is everything that Ethereum is not — cheap, fast and user friendly — and that has made it the blockchain of the moment in this memecoin era we're currently living through.

This past week, however, we've learned that fast and cheap can be just as user-unfriendly as slow and expensive.

The reasons why Solana has suddenly gotten so unfriendly for users are a little technical for my non-technical brain (see here ($), here and here for accessible explainers).

But here's my non-technical explainer: Solana is having its CryptoKitties moment.

And here's my non-technical takeaway: This is probably for the best!

Crypto's Moonshot

At first glance, Solana's sudden unusability is a little disappointing. It's been seven years since CryptoKitties took down Ethereum and we still haven't figured out how to make decentralized blockchains usable.

On second glance, it may seem even more disappointing. It's been seven years since CryptoKitties and the primary alternative to Ethereum is being taken down by something even sillier than cat jpegs.

In addition to the ongoing frenzy for memecoins, the proximate cause of Solana's current unusability is ORE, a bitcoin-inspired "digital currency" that runs on Solana.

If running a proof-of-work bitcoin clone on proof-of-stake Solana sounds even less useful than CryptoKitties to you, I recommend trying it — you'll enjoy seeing just how right you are.

When you download and run the Ore software, it shows you all the hashes it's guessing on your behalf in real time — long, incomprehensible chains of numbers and letters flashing by like a ticker tape on speed.

It felt a little Clockwork Orange to me and I turned it off after about two minutes (without having mined a single ORE token) — so it's not my fault Solana has been rendered unusable.

It's not really ORE's fault, either, though — crypto is permissionless, so anything that can be done will (eventually) be done.

Should be done, even.

You might prefer that Solana be taken down by DePIN or something more obviously useful than ORE and memecoins.

But this might work out for the best.

Unlike the Ethereum community, which took CryptoKitties as evidence that frivolous things don't belong on the serious business of layer-1 blockchains, the Solana community appears to be embracing the spam.

Instead of introducing Ethereum-style MEV (aka, frontrunning), raising transaction fees or moving users to layer-2s, Solana is doubling down on cheaper, faster and friendlier.

This is the hard way to create a shared state (aka, a decentralized blockchain) — and even if successful it's not obvious that it will lead to anything more useful than proof-of-stake Bitcoin and ever-more memecoins.

But landing a man on the Moon was hard, too — and at the outset, that was the only reason to do it.

There was no immediate benefit to the Apollo Moon missions, but they unexpectedly created breakthroughs in technology that led to the semiconductor industry, produced the iconic "Earthrise" photo that galvanized the environmental movement, and inspired an all-time great film starring Tom Hanks and Kevin Bacon.

None of those valuable outcomes were any more predictable at the outset than crypto's ultimate outcomes are now.

It may be a similarly long road — Solana's current troubles are the latest evidence that making a blockchain fast, cheap and decentralized is hard.

But that's exactly why it's worth doing.

― Byron Gilliam

This issue is brought to you by:

Aura provides digital security protection to keep your personal information, passwords, online activity and tech safe from online threats. It's easy to set up, all-in-one protection from identity theft, financial fraud, malware, scam sites and so much more.

Now for a limited time, Aura is offering a 14-day FREE trial plus up to 55% off an Aura subscription.

Start your free trial

SEC signals to Uniswap that enforcement actions are looming — Read
Understanding the hold-up on spot bitcoin ETF options approval — Read
This Bitcoin halving will be different — the institutions are here — Read
Liquid staked bitcoin provides new yield option for BTC holders — Read
Restaking protocol EigenLayer heads to Ethereum mainnet — Read

The Future of Bitcoin Smart Contracts

In this episode, Matt and Amine, co-founders of Arch, discuss how the Taproot upgrade and Ordinals have enabled programmability and DeFi on the Bitcoin base layer. They explain Arch's novel approach to bringing smart contract functionality to Bitcoin without compromising on security by using a UTXO model, a ZKVM for parallel transaction execution, and a Proof-of-Stake verifier network. Stay tuned for all of this and much more!

Watch or listen to Empire on YouTube, Spotify or Apple.

Thank you to our sponsor:

If you're building anything in Web3, you most likely need oracles and even VRFs. Get the freshest price feeds and dVRF free for 12 months from Supra. Join their limited time early integration program for free access to the fastest oracles and dVRF across 50+ blockchains

Even if you're not a builder, you can earn $1,500 by referring Web3 projects to use Supra services through this program. The projects get the fastest services for free, and you earn $1,500 for every referral.

Ignas | DeFi Research @DefiIgnas

Farmers swiftly move on after airdrops.

Recently, Tensorian NFTs dumped by 50% following the $TNSR token airdrop.

If they treat LRTs the same, dumping them for ETH could unpeg LRTs from ETH's price.

Only EtherFi enabled withdrawals, so on-chain liquidity is crucial to… twitter.com/i/web/status/1…

Apr 10, 2024

150 Likes 13 Retweets 13 Replies

David O'Mara 🛡️ @davidomaraX

Coinbase's total revenue from Base has now surpassed $40,000,000.

Starting to go parabolic! 🔥

Apr 10, 2024

426 Likes 52 Retweets 29 Replies

Jonah @jvb_xyz

GBTC holds 314,000 BTC right now.

I conservatively estimate that AUM will drop by another 180k BTC this year, 90k of which will rotate into spot/other ETFs and 90k of which will be sold outright.

The halving reduces supply by 115k BTC thru year-end, more than offsetting this.