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Good Morning.

Bears are dead. The total crypto market cap blew past $2.3T. Blast is launching tomorrow, AI coins are flying, and gas fees are becoming increasingly unbearable. Here’s more bull hopium, we still have the halving, Ethereum ETFs, and fed interest shift to look forward to.

In Today's Email:

• What Matters: Blast hits $2B+ in TVL 📈 

• Case Study: Governance tokens’ complexity 👨🏻‍⚖️

• Governance & Features: Synapse product launch 🚀

You read and share. We listen and improve. Send us feedback at [email protected].

TOGETHER WITH

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WHAT MATTERS

Blast Hits $2B+ in TVL Ahead of Mainnet

State of play: Blast has surpassed $2B in TVL before its mainnet launch on Feb 29. Blast announced the milestone on X that over 157,638 community members are now earning yield and Blast Points as rewards.

• As of the time of writing, Blast's TVL stands at $2.15B.

• Blast launched in early access in November 2023 after receiving a $20M investment from Paradigm, Standard Crypto, and others.

Recently, Blast also announced the winner of its “Big Bang” competition, a competition for builders on Blast that rewards the winner with a piece of airdrop allocations for developers.

Here are some interesting projects that win the Big Bang competition:

• Blaster - a DEX not just to trade and earn, but also to launch tokens.

• Particle - a permissionless leverage trading protocol.

• Redstone Oracles - a modular oracles designed for DeFi.

• Blast Futures - a perps DEX with native yield.

• Gelato - a rollup-as-a-service platform.

Why it matters: The team behind blast are killer operators that have shown their ability to use incentive mechanism designs to boost product growth (see Blur). We shall see how they execute on Blast in the coming days.

For builders and investors: Try the products but be cautious at the same time.

• Blast-based gambling project RiskOnBlast reportedly executed a rug pull, vanishing with over $1M (420 ether) from a token presale on Feb. 25.

CASE STUDY

Complexities and Challenges of Governance Tokens

Credit to Ro Patel & Hack VC for the original piece.

State of play: Ro Patel from Hack VC delves into the intricate dynamics of governance tokens, casting a critical eye on the common issue where these tokens struggle to deliver tangible value to their holders.

Here are the key takeaways from the piece:

• The article discusses the discrepancy between the theoretical advantages of governance tokens and the often unrealized material benefits for holders.

• Ro highlights that the promise of decentralization in crypto and governance tokens has often not met expectations due to challenges like complex governance models and regulatory barriers.

• Ro argues that for a governance token to be successful and to truly accrue value to its holders, it must be embedded within a clear and viable monetization strategy.

• This strategy should not only focus on the speculative trading of the token but also on creating real economic value that directly contributes to the financial health and growth of the platform.

• Ro suggests that crypto adopt web2's clear business models and sustainable strategies to enhance the viability of governance tokens.

In summary, Ro calls for a more nuanced understanding of the value and function of governance tokens in the crypto space, advocating for models that align the interests of token holders with the long-term success of the platform.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

INSIGHTS

Stablecoin Market Value Hits $140B

The stablecoin market is growing rapidly, with its total market cap surpassing $140B in February, the highest since December 2022.

• The stablecoin market's rapid expansion is driven by new investments in the digital asset market and contributing to the ongoing crypto rally.

• The stablecoin market reversed an 18-month downtrend in early November 2023, growing by 12% or ~$15B since.

• Vetle Lunde from K33 Research noted that ~$10B of the growth has occurred since the beginning of the year.

Over the past month, Circle's USDC saw its market cap increase by more than $2.5B, exceeding the growth rate of Tether’s USDT in the same timeframe.

• Tether's USDT reached a record $98B, growing by $2B in a month.

• USDC surged from $24B to over $28.5B since the year's start, adding $2.5B in a month and surpassing USDT's growth.

• USDC's growth may be attributed to strong US investor demand driving Bitcoin's rally, with USDC favored by US traders. While USDT dominates in Asia, Africa, and Latin America.

• This growth aligns with Binance relisting USDC pairs and the launch of spot Bitcoin ETFs in the US, which often use Coinbase for settlements, as noted by a Coinbase market report.

• USDC is issued by Circle which is backed by Coinbase. Circle reportedly plans to go public fairly soon.

FEATURES & GOVERNANCE UPDATE

Synapse Testnets Live

Synapse Labs has announced the launch of its Synapse Interchain Network and Synapse Chain.

• The Synapse Interchain Network (SIN) is the pioneering optimistic PoS interchain network that allows for trustless communication across different blockchains. SIN is designed to be trustless, permissionless, and modular, enhancing security and interoperability.

• Synapse Chain is an Optimistic L2 built on the SYN OP Stack. It integrates the Synapse Interchain Network for seamless interchain transactions. Synapse Chain's architecture is designed for native interchain capabilities, enhancing the efficiency and accessibility of cross-chain operations.

Other notable update:

• Arweave launched a public testnet for Arweave AO, a scalable blockchain network based on its decentralized data storage platform.

• Uniswap introduced three new tools aiming to facilitate easier transactions on the platform.

Other notable feature updates:

• Tranchess launches V3.

• Across Protocol V3 goes live.

• Starknet launches StarkGate 2.0.

• Sushiswap launches Sushi Bonds.

• MYX Finance goes live on Arbitrum.

• Dymension embedded AMM goes live.

• Matcha launches Matcha Auto on Base.

• Abracadabra launches V3 and MIMSwap.

• Ethena goes live on the Ethereum Mainnet.

• PrismaLRT goes live on Ethereum Mainnet.

• Filecoin announces integration with Solana.

• ZKX Pro Trade goes live on Starknet Mainnet.

• Osmosis DEX now supports Wrapped Bitcoin.

• Lyra launches Coinbase Cloud-powered Lyra Wallet.

• Bracket Labs launches the GMX market on Passage.

• Avantis launches native native bridging and swapping.

QUICK BITES

• IRS hires former Binance US exec.

• MicroStrategy acquires 3,000 BTC.

• Kraken launches institutional service.

• Senator Warren hits out at crypto again.

• Justin Sun says he owns $1.6B of Bitcoin.

• Spot Bitcoin ETFs now hold 300,000+ in BTC.

• HTX withdraws license applications in Hong Kong.

• Grayscale's Bitcoin Trust outflows reach new lows.

• SBF’s lawyers ask for a prison sentence of 63-78 months.

• BitForex website goes dark amid reported $57M outflows.

• Gauntlet becomes Morpho Lab’s risk steward after Aave fallout.

• Bitcoin Spot ETF volume sets daily record, besting launch day.

• Jae Kwon’s firm to launch GovGen as a prelude to AtomOne fork.

• Ethereum Foundation gives Dencun an upgrade date of March 13.

• Hong Kong prepares sweeping rules to foil stealthy crypto purchases.

• Hong Kong plans to roll out a regulatory sandbox for stablecoin issuers.

NOTEWORTHY READS & MEME

• Knower’s read on dreaming a little bigger.

• Variant’s read on how crypto can make an impact.

• Coinmetrics’ read on breaking byzantine fault tolerance.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.