Symbiotic Restaking Launch With $200M in TVL

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Good Morning.

The market is down with $250M+ in liquidations of leveraged derivatives positions as traders de-risk ahead of tomorrow’s CPI report and Fed meeting. FWIW, BTC has dumped a day before the FOMCs meeting 4 times in 2024.

Thus far, it always recovers the next day.

In Today's Email:

• What Matters: Paradigm-backed Symbiotic launch 🚀 

• Case Study: The state of meme coin 📉 

• Governance & Features: OP’s fault proofs 🔴 

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

WHAT MATTERS

Mellow and Symbiotic Launch

State of play: Paradigm-backed Symbiotic has emerged from stealth mode. It seeks to compete with Eigenlayer in the liquid restaking arena.

• Symbiotic enables networks to tailor their staking setups, including asset collateral, node operator choice, and reward and penalty systems, coordinated through Ethereum.

• Symbiotic co-founder and CEO Misha Putiatin stated that the goal was to create a protocol suitable for nearly any decentralized network.

• Symbiotic, acting as a flexible and controllable thin coordination layer for network builders, will be immutable from launch like Uniswap and does not require a token to function.

At the same time, LRT project Mellow, which aims to decentralize LRT creation with options for varying risk profiles, launched yesterday as the “flagship” for the newly introduced Symbiotic.

• Mellow will join the Lido Alliance after receiving 99.89% approval in the application vote.

• Mellow is a "modular infrastructure for creating LRTs," providing permissionless vault smart contracts that allow depositors to choose their restaking options.

• Mellow was established in 2020 with backing from Cyber.fund, and its initial fundraiser in 2021 was led by Arrington Capital, ParaFi, and Robot VC.

What’s next: Mellow will operate within Symbiotic’s AVS ecosystem, while Symbiotic will compete with restaking powerhouse EigenLayer ($18.5B TVL).

• Currently, Symbiotic has ~$200M in TVL. Before challenging EigenLayer, it needs to surpass Karak, which has ~$1B in TVL.

Why it matters: Mellow is part of Lido Alliance; Lido’s market share in liquid staking is 72.36% with ~$33B TVL.

Our take: Eigen-led restaking popularity has incentivized large VC funds to back their own horse — study to cap table of Eigen, Karak, and Symbiotic to know who’s behind who.

For builders and investors: More restaking options means more competition, which is better for the builders when they’re choosing the platforms to build on top of.

CASE STUDY

The State of Meme Coin

Credits toCoin Metrics for the original piece

State of play: according to CoinGecko data, Solana-based meme token GME fell 25%, reversing a 200% rally from the past week. Related tokens like Roaring Kitty (KITTY) and cat-themed tokens lost at least 10%.

• Dog-themed tokens like DOGE, SHIB, and FLOKI saw gains reduced by 4% to 10%.

Coin Metrics recently published a report titled "Meme Coin Mania," which analyzes the current state of the meme coin sector, detailing the activities and trends within this rapidly evolving market.

Here are the key takeaways from the report:

Rise of Meme Coins

Initially popularized by Dogecoin in 2013, the meme coin sector has grown substantially, reaching a market capitalization of $60B by June 2024.

• These coins often feature humorous themes and are largely driven by community engagement and market sentiment.

• Newer meme coins are becoming popular due to lower transaction fees and ease of creation, while established coins like Dogecoin and Shiba Inu maintain a significant market presence.

Market Performance: Meme coins have shown notable market strength, outperforming major blue-chip crypto assets and the Information Technology sector with a significant surge in value, particularly from October 2023 to 2024. Meme coins averaging 740% returns as of June.

Trading and Market Activity: Meme coins recorded $13B in spot trading volumes in March this year, surpassing major blue-chip cryptos like Ethereum and SOL.

Risks: Meme coins are risky due to high market volatility and potential manipulation from concentrated ownership, as evidenced by a high Gini coefficient of 0.8.

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

ZKsync to Airdrop 3.6B ZK Tokens

Next week, ZKsync will airdrop 3.675B ZK tokens, representing 17.5% of the total supply to its early users. The airdrop can be claimed starting next week until January 3, 2025, with contributors eligible from June 24

• This will be a one-time airdrop.

• The 17.5% ZK airdrop is divided between users (89%) and contributors (11%).

• ZKsync shortlisted 695,232 wallets for the airdrop.

• The ZK token distribution will airdrop a maximum of 100,000 tokens per address.

• The community airdrop is based on a points system. Wallets received points for actions.

• Eligibility and allocations for the airdrop were determined by a snapshot of activity on ZKsync Era and ZKsync Lite, taken at 0:00 UTC on March 24, 2024.

• 49.1% of the tokens will be reserved for ecosystem initiatives, 17.2% for investors, and 16.1% for the Matter Labs team.

FEATURES & GOVERNANCE UPDATE

OP Mainnet Fault Proofs

Permissionless fault proofs are now live on the OP Mainnet, marking the OP Stack's arrival at Stage 1. More OP Stack Chains, like Base, Metal, Mode, and Zora, will upgrade and include this functionality.

• The permissionless Fault Proof System on OP Mainnet allows ETH and ERC-20 withdrawals without third-party involvement, and users can challenge invalid transactions.

• The Optimism Security Council can revert the system to a permissioned state for safety.

• This setup meets L2Beat’s Stage 1 criteria. The OP Stack reaches Stage 1 through these fault proofs and additional safeguards that ensure quick, effective responses to bugs.

Other notable feature updates:

• Spectra goes live.

• LayerZero goes live on Solana.

• 3Jane goes live on EigenLayer.

• Dydx launched its Android app.

• Coinbase launched Smart Wallet.

• Iota launched the mainnet of IOTA EVM.

• Term Structure goes live on the mainnet.

• Pac Finance launched the "Pac 2.0" protocol upgrade.

QUICK BITES

• Farcaster falls in activity.

• ZKsync plans 3.6B ZK tokens airdrop.

• Paradigm unveils Symbiotic protocol.

• Binance invests in L2 network Zircuit.

• Arthur Hayes joins Covalent as an advisor.

• Trump says he will advocate for BTC miners.

• Metaplanet discloses a $1.6M BTC purchase.

• CryptoCom secures Ireland’s VASP registration.

• Tether expects to invest $1B+ in deals in the next year.

• Polygon announces treasury grants programs for builders.

• PleasrDAO sues Martin Shkreli over Wu-Tang album rights.

• Uniswap Labs hires ex-Coinbase exec as Chief Legal Officer.

NOTEWORTHY READS & MEME

• Shoal’s read at the case for computer DePINs.

• 100y’s read on how SUAVE can address builder centralization.

• Primev & Murat’s read on commitment games and where to find them.

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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.