DefiIgnas

Layzero voted twice to activate the fee switch with 95%+ voting in favor but...

It failed because the quorum was not reached.

The DAO votes on the fee switch every six months.

Next vote in 6 months.

Where are all the $ZRO holders? Just 13% of the quorum was reached.

Voting apathy is an argument against DAOs and sticking to web2-like managed companies with strict hierarchy.

Tbh, most DAOs would struggle to reach quorums if not for delegations where holders can give voting power to someone else.

But Layerzero doesn't even have a forum for people can discuss proposals less a delegate program.

Seems the DAO isn't a priority for them.

What's the upside for L2 tokens?

Fee sharing?

Even if they turned on fee sharing, it's not much:

Arbitrum made $19.5m in fees in a year. Optimism $18.3m.

zkSync just $1.3m and Starknet $600k.

This Price(FDV)-to-Fees ratio puts Arbitrum at 137.8x, and Optimism at 205.7x

Starknet - 4204x

In context, TSLA trades at 187x P/E ratio so Arbitrum might even look cheap.

But Tesla is an exception. S&P500 trades at ~ 29x the earnings.

This makes L2 tokens overvalued by a lot. Unless we expect their adoption and fees to pick up massively.

Maybe governance?

Hoarding tokens gives voting power to direct incentives.

But projects like @lobbyfinance make bribing cheap. Recently one user paid 5 ETH (~$10k) on Lobby to buy 19.3M ARB (~$6.5m) voting power.

I believe that most projects issue tokens for two main reasons:

- To raise capital
- To bootstrap adoption

L2s are bootstrapping adoption, like the Arbitrum DRIP proposal, which allocates 80M $ARB.

The goal is to attract sticky liquidity, outlive, and outcompete other L2s.

If we apply the Pareto principle, 80% of the liquidity will eventually concentrate in 20% of the L2s.

So, perhaps we need to wait until the L2 winners become clear and then invest in them.

This implies waiting for most L2s to naturally phase out.

Yet as more L2s launch with new tokens, the timeline for clear winners to emerge is extended.

(Except for Base... Which doesn't have a token (just a stock)).

$INK is about to launch a token with liquidity mining to inflict even more pain on the remaining L2s.

A cursed sector to invest.

Just claimed a fat Stimmy from @Moonberg_ai.
Didn't even know I was on the list.
You probably are too ●●

The Russian ruble has entered the stablecoin game.

A7A5, the first ruble-pegged stablecoin, moved $9.3B in just 4 months, @FT reports:

- Launched in Kyrgyzstan, outside Western reach
- Backed by ruble deposits in Promsvyazbank (sanctioned)
- Runs on Tron & Ethereum
- Used as a bridge to USDT & cash out abroad, bypassing SWIFT & sanctions

After the US closed Garantex, Russia's CEX, A7A5 and Grinex (a new Kyrgyz exchange) stepped in.

It’s not retail driven.

Most flows are weekday, done during office hour, reportedly trade payments or state linked actors.

The stablecoin are geopolitics now.

How to Find Tokenless Protocols Worth Your Time

In this blog I'll share:

- 7 tools I use to find hot projects
- 7 dApps to check out
- 5 crypto bloggers to follow

Read it here:

Wait, so Katana launching because a proposal to use assets idly sitting on the Polygon bridge failed due to backlash?

Instead, Polygon incubates Katana as an L2 on Polygon (making Katana an L3?).

The proposal to use bridge funds caused Aave to abandon Polygon altogether as it would:

1) deposit assets to a competitor Morpho

2) pose significant risks to bridgoooors

Katana is a compromise or a second-best option.

But it makes sense as Polygon's bridge funds won't be touched. And $POL stakers will get 15% of the KAT airdrop.

Neet.

Interestingly, Katana is an Opinionated DeFi chain and will decide on where the funds will flow to optimize for yield and liquidity.

It's opposite to all other L1s/L2s that seek neutrality.

Three pre selected protocols are:

- Morpho
- Sushi
- Vertex

This dynamic allows KAT/vKAT tokens to be used for bribery: not just for voting on KAT emissions to boost liquidity but also for protocols seeking preferential treatment.

It requires one key thing: liquidity.

As TVL grows, Katana becomes more attractive for new protocols to receive preferential treatment.

Pre-deposits closed with $170M in TVL.

Not bad, especially since it will initially focus on just three protocols, and the GSR market maker will deposit liquidity where needed.

-----

I see Katana in light of the new emerging trend in DeFi: "Vaultization"

As DeFi gets more complex and number of protocols increase, users are having hard time managing their own assets.

Instead, multiple vault protocols (Upshift, Veda...) are emerging as active managers to do the hard work for you.

It changes the game.

Vault protocols become user-facing platforms with the discretion to decide where to deposit assets.

As a result, DeFi protocols no longer chase users directly but instead partner with vault managers to attract TVL.

Katana goes a one step further by having a new chain with a token to control for emissions.

Just a hunch but this cycle will end with $ETH ATH.

BTC, and other alts will top before ETH.

How do I know this?

Because I'd likely rotate my gains to ETH for a last wild hoorah.

Just a hunch but this cycle will end with $ETH ATH.

BTC, and other alts will top before ETH.

How do I know this?

Because I'd likely rotate my gains to ETH for a last wide hoorah.

I've made 150 trades in the past 4 years.

Out of those:

- 94 were good trading decisions
- 56 bad

That's just a 62% win ratio.

Decisions involve ETH/BTC/SOL rotations; if I rotate SOL to ETH and ETH underperforms SOL, it's a bad decision, even if ETH pumps in USD terms.

My best decisions were: selling ETH for SOL and later for HYPE, buying BTC.

And, obviously, farming airdrops (but don't show up in decision score).

Worst? Buying and not selling on time these:

$AR
$ATOM
$STX
$USUAL
$S
$FRIEND

Can't win them all.

$HYPE fud points:

- Coinbase/Robinhood launching futures in the US
- 4.7M HYPE in 7D unstaking queue; one whale with 2.4M unstaking
- Binance is (secretly) building a competitor
- Funds stored in 3/4 multi-sig
- Just 21 active validators - centralization risk
- Sanctioned entities like NK trading on it
- Lack of Lindy effect: Still not battle tested

Anything else?

With all FUD mentioned, can we pump again, pls?

I'm getting less motivated to chase hot new protocols.

Lazy? Bored? Not quite, I think.

Or maybe it's not worth the risk of exploitation for a relatively small airdrop?

Maybe there are too many new projects with just incremental improvements... without real 0 to 1 innovation?

Hard to know which one is worth your time.

If I'm not alone in this, then it's tough for new projects but also offers more opportunities for more active degens.

In any case, I will start doing more research on what crypto has to offer... Can't stop the grind.

After a good weekend of rest lol

Feels like CT has bear market PTSD and has forgotten how to dream.

Since 2017 ATH market cap of $0.5T, crypto is now a $3.3T industry.

Excluding BTC, it's just $1.3T.

You think this is where we stop growing?

Consider that Tesla alone is a $1T company, Apple $3T and NVIDIA at $3.5T....

....there's so much more upside for crypto and catalysts are lining up.

----

I believe this bull run consists of two major parts:

First, BTC outperformed due to external to crypto (macro) tailwinds: ETF, world uncertainty, USD debasement etc. Saylor buying, too.

BTC is a the only macro crypto asset.

Now, we're ready for the second stage: our internally built innovation is being adopted by TradFi and the wider world.

Thanks to regulatory clarity, Paypal, Stripe, Visa/Mastercard entering crypto payments, blockchains finally scaling etc.

We're finally reaching escape velocity, liberating us from the same money recycling Ponzi games that create no value to the 'real' world.

Protocols that manage to offer value to that external world, will flourish:

It starts with blockchains themselves: Solana, Tron, Ethereum being used by Tradfi for RWA & stablecoins.

Then TradFi will adopt our smart contract platforms like Aave, Uniswap, and crypto wallets (already happening).

Seeing growth of the industry more investors will want to get exposure to crypto beyond BTC, hopefully buying value adding tokens.

TradFi already got a taste of crypto with BTC, and now they see CRCL successful IPO with more IPOs to come.

As they get more comfortable with crypto and regulatory clarity is here, the TradFi and crypto worlds will get closer and closer.

In which scenario crypto stops growing from this point onwards?

At $1.3T altcoin market cap, the upside potential is HUGE.

Kraken's $INK .... just a liquidity mining token?

At just $7M in TVL after 7 months since launch INK is struggling to get adoption.

Contrast that with Base with $3.75B in TVL despite no token in sight.

It shows the power of Coinbase to push adoption: from stablecoins to cbBTC.

Even after the INK announcement & airdrop news, the TVL hasn't gone up. I suppose a retroactive airdrop isn't in the plans?

Otherwise insiders would've aped millions into Ink.

So, my initial impression is that $INK is just a tool for liquidity mining.

At least, at first.

Aave will be a first 'liquidity protocol' - I'm expecting good old DeFi yield farming opportunities like from 2020 when Avalanche, Polygon etc. were giving rewards for depositors on Aave.

-----
Interestingly, @krakenfx posted that isn't a vibe and prayer token but launching with utility. "Designed for usage, not speculation."

And "Importantly, $INK does not govern the Ink L2 [...] $INK is for the user and application layer."

What's the utility? Anyone knows?

$INK must have some value accrual model, perhaps rev share from sequencer fees?

In any case, at $7M in TVL, Ink could offer great opportunities.

And I am really happy for a new token!

Token > IPO on Tradfi

Although Kraken will have both...

Top revenue-generating protocols share value with token holders using simple tokenomics.

On a flip side, the more complex the tokenomics, the more cautious I'm about the project.

Part of this is due to me getting rekt with overly complicated Ponzi-tokenomics:

If you don't understand complex tokenomics, you are the exit liquidity.

So, less complicated is not a bad thing, although it's less exciting.

Just check $BERA with their 3-token model: The model was supposed to boost liquidity, yet without real revenue, the team is considering revamping tokenomics.

At the end of the day, if there's no value for the token, over-engineered tokenomics won't be able to maintain its price.

Revenue sharing to holders is key.

Question: Which model is your favorite?

- $HYPE does automatic buy backs
- $AAVE ad hoc: DAO votes on model (currently buy back)
- $SKY/ $MKR: Stake $SKY and get yield in stablecoins $SKY
- $veAERO: Stakers get trading fees while LPs get AERO emissions

We're at an exciting stage of experimenting with how to add value for token holders.

But while crypto is moving towards simplicity, TradFi is FOMOing into crypto via reverse mergers and strategic crypto reserves.

Seems that the top this type will come from TradFi instead of our own over-leverage.

Protocols success ≠ token price.

Seems obvious but often overlooked.

Tokens perform better when the team really cases about the token: focusing on liquidity, revenue sharing, and holding/locking their own tokens.

So many cases where token is just a fundraising and liquidity bootstrapping tool.

Crypto treasury companies imploding was my top signal…

Funny how stablecoins grew fast because the banks didn't want to partner with crypto exchanges and businesses.

By restricting crypto access to banks, stablecoins now pose a risk to the banks themselves.

The greatest self-own mistake by TradFi.

Any tips on how to be a better profit taker?

And when/how to sell?

I'm okay at identifying new narratives, hot projects, farming airdrops, and yapping but selling is my weak skill.

Last bull cycle I sold $ETH at $2k - was mentally exhausted after a crazy bull run and was afraid to lose more after a 50% dip.

$ETH then pumped 125% after my sell. It was painful.

So, how do we actually take profits?!

Tired of the noise on CT?

Read more crypto research publishers to catch the signal:

- @castle_labs: Protocol deep dives
- @Kairos_Res: Sector deep dives
- @ournetwork__: Data-driven narrative research
- @blocmatesdotcom: Degen's paradise
- @OAK_Res_EN: Monthly market reports & data dashboards
- @ChorusOne: Enhance your crypto understanding
- @OnChainWizard: For traders and degens alike

VC research (beware of some bias, but gain VC insights):

- @ZeePrimeCap writings and @mattigags' contributions
- @dragonfly_xyz (visit their website for research)
- @placeholdervc (fewer posts in 2025, but still valuable)
- @galaxyhq: Frequent research and market updates
- @multicoincap: Often controversial (yet insightful) investment theses
- @a16zcrypto: Topics on regulation, tokenomics, stablecoins, etc.
- @paradigm: Similar to a16z with great surveys
- @BinanceResearch: CEX research for beginners and degens alike

Established sources:

- @blockworksres
- @Delphi_Digital
- @nansen_research
- @MessariCrypto

News media:

- @DLNewsInfo: Excellent insider story coverage

Don't forget independent bloggers:

- @TheDeFinvestor
- @crypto_linn
- @Zeneca
- @patfscott
- @Defi0xJeff
- @crypthoem
- @DU09BTC
- @arndxt_xo
- @0xjaypeg
- @2lambro
- @Route2FI
- @alpha_pls
- @ViktorDefi
- @thedailydegenhq

And also, subscribe to my blog!

Apologies if I missed yours. No offense, just share your blog/research in the comments!

Anything else I missed?

Unpopular opinion: Airdrops should be vested. Especially for KOLs.

Current playbook: Claim airdrop ASAP and sell. And move on.

Even if you're bullish on the token it's better sell first and then buy back later as airdrop induced selling stops.

Vesting playbook: Airdrop launches at high FDV. You get huge airdrop. You feel rich. But you need 6 months until tokens slowly unlock.

What do you do?

Continue to be bullish about the project. Post about it. Check on the community sentiment. Check what the team says etc.

If airdrop is vested, you are aligned in the longer run.

Sure, you can say it delays the inevitable dumping but projects get valuable mindshare in the meantime.