Michael Egorov Seeks 21M CRV Grant

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Good Morning.

BTC hit $61,000 over the past few days but we’re quickly back down. Unsurprisingly, the massive sideways range that we’ve been ranging in continues without any clear trends on where price action will lead us next.

It’s a tough liquid environment out there.

In Today's Email:

• What Matters: Babylon’s BTC staking ₿

• Case Study: Drift’s prediction market 👊 

• Governance & Features: Egorov seeks 21M CRV 📜 

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WHAT MATTERS

Babylon’s Self-Custodial BTC Staking

State of play: Babylon announced that its self-custodial BTC staking mainnet will go live in two days (phase 1).

• This applies Bitcoin’s economic security to various decentralized systems under a self-custody model.

• Eventually, Babylon’s BTC timestamping protocol will enable the timestamping of any data sent to the platform using Bitcoin’s blockchain.

• Some example applications include securing and timestamping PoS blockchains.

What’s next: There are 3 phases of Babylon BTC staking.

• After phase 1, Babylon will launch a PoS chain to receive the crypto-economic security from the BTC locked in phase 1.

• The last phase will create a marketplace for shared security, allowing any PoS systems to utilize BTC staking security.

Why it matters: Babylon extends BTC economic security to other decentralized systems, which can potentially help BTC as a network once the mining rewards can no longer keep up with the price action.

Our take: It remains an open question how other systems will utilize BTC’s economic security, as well as how they will balance it with their own internal tokenomics design.

For builders and investors: BTC is a fairly unproductive asset. Any financialized systems that extend BTC’s use-case will unlock multi-billions in value.

CASE STUDY

Drift vs Polymarket

Credits to @Mikey0x_ for the original tweets.

Drift is quickly shaking up the competition in the prediction market platform.

Despite Polymarket’s increased liquidity rewards, Drift offers tight spreads and deeper liquidity, making a strong impact from day one after launch.

• Polymarket raised their daily LP rewards for the Trump/Kamala markets from $750 to $1000. This move aims to attract more liquidity and trading activity due to increased incentives.

• The spreads on Drift’s Trump market are just as tight as those on Polymarket. Additionally, Drift has deeper liquidity within 3 ticks (price points) compared to Polymarket, even though it’s a new platform.

• Arbitrageurs are motivated to trade on Drift without any liquidity rewards, meaning they are actively creating volume on Drift.

• As a result, Polymarket is the only platform currently offering liquidity rewards, effectively spending money to attract traders.

• However, Polymarket has over 10M outstanding shares, showing high trading activity, while Drift, being new, has only 113,000 shares.

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INSIGHTS

Dim Selk’s Thesis: NEAR

Credits to Dim Selk for the original tweets.

The growing intersection of AI and blockchain technology presents a unique investment opportunity. Dim Selk of InternDAO argues that NEAR Protocol will become the go-to platform for AI dApps and enter the top 10 by market cap.

Here’s the summary of Dim’s thesis:

• As a legitimate AI-focused L1, NEAR is well-positioned to capitalize on this growth.

• L1 blockchains dominate the top crypto tokens by market cap, making NEAR’s positioning as an AI-centric L1 even more attractive.

• NEAR is led by thought leaders in AI.

• NEAR has approximately $300M in cash and 1B tokens.

• NEAR is on track to complete its technical roadmap, including the Nightshade 2.0 upgrade and the mainnet release of Chain Signatures.

• NEAR’s token is liquid and well-distributed, and the majority of unlocks have been completed.

• NEAR is now committed to a multi-year strategy centered on AI.

FEATURES & GOVERNANCE UPDATE

Michael Egorov Seeks 21M CRV Grant

Michael Egorov introduced a governance proposal on Monday requesting 21M CRV (~$6.3M) to fund one year of operations for Swiss Stake AG, the company behind Curve’s development.

• The funds will scale crvUSD, enhance foreign exchange markets, and develop leverage products based on crvUSD over the next year.

• The proposal noted that the Swiss Stake was previously funded by a CRV allocation in August 2020.

• Egorov emphasized the need for continuous development to prevent stagnation, particularly stressing the costly security audits.

• The proposal has ignited heated debate within the Curve community, with many members criticizing its vagueness and lack of a clear roadmap, specific fund allocation, and performance metrics.

• Egorov stated that his lawyers advised against offering specifics but expressed willingness to challenge these constraints to provide more clarity.

Other notable feature updates:

• Mantle launches $FBTC.

• Aavegotchi launches Geist.

• DubdotSocial launches on Solana.

• Solayer launches the Solana Restaking.

• Tether expands USDT to the Aptos blockchain.

• Spark has kicked off The Tokenization Grand Prix.

QUICK BITES

• The SEC rejected Cboe’s 19b-4 filings for Solana ETFs.

• Galxe launches the alpha mainnet of its L1 Gravity chain.

• Crypto whale loses $55M in DAI stablecoin phishing attack.

• Mt. Gox moves $700M+ worth of BTC to an unknown wallet.

• Babylon set to launch self-custodial BTC staking in two days.

• Mango Markets DAO votes on settlement proposal with SEC.

• State Street partners with Taurus for custody and tokenization.

• Hong Kong lawmakers call for a legal framework to regulate DAOs.

• Chinese authorities classify virtual asset transactions as acts of money laundering.

NOTEWORTHY READS & MEME

• Shual’s read on DeFi market momentum.

• Rain & Coffee’s read on super-builders and MCP.

• Coin Metrics’ read on unwrapping wrapped assets & wBTC.

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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.