New Way of Making $$ with ETH.. 🤔

GM, folks 👋🏻 - Happy Monday.

Crypto markets were crabbing over the weekend 🦀 — total crypto market cap stayed flat at around $1.1 trillion. Everybody is still raving about Coinbase's L2 move, with Goerli testnetETH returning 8x in a few days.

That said, if there's only one thing you read today, it has to be this.

Let's get into today's issue 👇

In Today's Email:

• What Matters: Goerli testnet ETH rose to $1.69 📈

• Products: Homebase, tokenized & regulated real estate NFTs 🏠

• Charts: Solana active addresses fell, BendDAO NFT market dynamics 💱

WHAT MATTERS

Goerli Testnet ETH Price Pushed by Speculators

State of play: LayerZero, an omnichain interoperability protocol has launched a market for "testnet ETH". These testnet ETH are intended to have no value, as they are used to support pre-production testing 💻

• In the past developers need to use faucets or ask Ethereum testnet developers for these testnet ETH.

• LayerZero's argument is that the existence of a market will make it easier for anybody to acquire testnet ETH, for development purposes.

• Many have criticized LayerZero's move, stating that it sets a bad precedent without any clear upside for the broader Ethereum ecosystem 🤔

What’s next: Ethereum developers are planning to build a new testnet called Holli. The idea is to make it easier for developers to acquire testnet ETH, removing the need for a secondary market.

• Fun fact, only a few large validators control the distribution of testnet ETH on the Goerli network. Polygon CISO's faucet himself has distributed over 6M in testnetETH for free, which is valued at over $4M at current prices 🤑

Our take: In a wild west open-source environment, people will always make markets so long as there's demand. We've seen this with NFTs being treated as altcoins with JPEGs, and now with ETH testnet tokens.

• This isn't good for Ethereum, but it's also nothing critical. The testnet would soon be unsupported and the testnet ETH will be worthless. This might also set back the development of smaller projects that don't have easy access to testnet ETH.

For builders: If you're building on Ethereum... well you know what to do.

For investors: Have a solid view of how you see the future of the crypto markets would become. The true value unlock won't be at the deep corners of DeFi or obscure testnet markets. Instead, it will be in how crypto as technology makes better products for our daily lives.

PRODUCTS OF THE WEEK

HomebaseDAO: Invest in Tokenized Real Estate 🏠

What is Homebase: Homebase is a platform to invest in real estate, for as little as $100. Powered by Solana, Homebase makes it easier for smaller investors to invest in rental properties and build their wealth via real estate NFTs.

• Via Homebase, investors are eligible for the cash flow, yield, and appreciation from the properties that they purchase 📈

• The process is fully regulated, with proper identity verification.

• How it works. First, Homebase puts the property under contract and sets up an SPV to hold the asset. Then, Homebase issues a public or private fund via Security Token Offering (STO). Then, after the filing with the US SEC, Homebase issues non-fungible security tokens via the Metaplex Solana NFT standard 📄

Other cool products:

• Casama, a web3 test-to-earn user research platform.

• Intropia, a platform to get introduced to web3 startups.

• LIKN, a web3 URL and linking tool.

• Lasagna, a tool to create NFT collections in seconds.

• Coinbet Finance, a web3 betting platform.

• Homebase, a platform to invest in tokenized rental properties.

• Unleash NFTs, a platform for NFT data-driven insights

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CHARTS OF THE WEEK

Solana's Number of Active Addresses Fell 📉

Solana # of active addresses fell more than 80%, from 1.29M to 250,000, in the past 9 months. The blockchain network has been one of the most badly hurt chains post the FTX fallout as the founders and ecosystem were closely tied (partially incubated) by FTX.

• To make matters worse, the network was down over the weekend, without a clear reason as to what caused the outage 🤷

Our take: Solana's cheap transaction cost is a double-edged sword. During the bull market, it was easy to start and launch low-quality projects in Solana. Low 6 figures rug-pullers were rampant in Emerging Markets, and many still run free because regulators are much weaker in EMs.

To watch: In a bear market, L1 blockchains depend a lot more on the success of decentralized applications built on their platform, rather than vice-versa. Successful dApps have the leverage to choose the chains they want to build on 👨‍💻

• To thrive, Solana needs to be able to maintain its network uptime, incubate real projects, and filter bad actors like the Saber DeFi ecosystem.

BendDAO Dominates NFT Lending

State of Play: Released in Q2 2022, BendDAO quickly rose to the top and now owns ~50% of the NFT lending markets, with MAYC, BAYC, and Azuki being the dominant collections collateralized for loans. Combined with the popularity of Blur and the ongoing NFT market dynamics, this development creates a dangerous precedent.

• Why? -- In short, it has the potential to cause a death spiral 🌀

• Liquidity is extremely thin and controlled by a few large NFT whales. The whales that move the last between their plays on BendDAO and Blur, will get hurt the most from the potential cascading liquidation caused by the leverage in the system, which has previously happened.

Our take: As NFT market infrastructures improve, collections won't be able to shy away from being treated as mere altcoins with JPEGs. Singular pieces created by notable artists might be treated similarly to fine arts, but the large majority of NFTs will simply become significantly less liquid altcoins.

QUICK BITES

• IMF wants more regulations for private crypto.

• Texas objects Voyager-BinanceUS deal.

• Solana attempts second restart as transaction freeze drags on.

• Dan Tapiero launches a new crypto PE firm.

• Lido reports largest daily ETH stake inflow.

• Mysten Labs CEO wants a better web3 venture capital model.

• Animoca Brands Chairman comments on Blur's NFT royalty position.

• BitFlyer's ex-CEO wants his former role.

• Testnet ETH price goes up on Goerli network.

MEME & NOTEWORTHY READS

• Proof of Stake Alliance's report on liquid staking tokens legalities.

• @jinglingcookies' thread on Eigenlayer whitepaper summary.

• Danny Ryan's musing on Ethereum recent development.

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

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.