This Week's Web3 Reads: a16z 2024 Crypto Outlook, Ethena Crypto Dollar War
a16z Crypto's 2024 Outlook: Key Trends and Insights
The 2024 State of Crypto Report highlights significant shifts in the industry over the past year. Crypto activity reached all-time highs with 220 million active addresses, driven by networks like Solana, Base, and NEAR. Stablecoins emerged as a key application, achieving product-market fit through their use in fast, affordable payments, surpassing traditional payment networks like Visa in transaction volume.
Infrastructure advancements, including Ethereum Layer 2 scaling and ZK technology, have drastically reduced transaction costs and unlocked new onchain applications. DeFi continues to grow, accounting for 34% of daily crypto activity, while AI integration with crypto is on the rise. The report also highlights crypto's growing role in U.S. politics, with swing states showing increased interest ahead of the 2024 election, and bipartisan support for crypto legislation like the FIT21 Act.
As blockchain infrastructure becomes more scalable, new applications in social networking, gaming, and prediction markets are beginning to take off, shaping the future of onchain experiences.
Puffer UniFi: Rethinking the Ethereum Approach to Rollups by 2077 Research
Ethereum’s vertical scaling through Layer 2 (L2) rollups has made progress, but rollups haven’t fully met expectations, facing issues like fragmented ecosystems, centralized sequencing, and limited value accrual for Ethereum. Despite these challenges, Ethereum remains committed to rollups as a scaling solution without sacrificing decentralization.
Puffer’s restaking-enhanced rollups offer a novel approach. By integrating Eigenlayer’s services and Commit-Boost, Puffer enables Ethereum validators to sequence transactions, enhancing decentralization and returning MEV to rollups. This approach aligns rollups with Ethereum’s interests, helping solve scalability and value capture issues.
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The Verge of Crypto Dollar War and Strategy of Ethena by Four Pillars
Ethena's USDe stablecoin has quickly reached a $3 billion market cap in just four months, making it the fastest-growing crypto dollar. Ethena's success stems from its unique approach to collateral management, featuring UStb (backed by BlackRock’s BUIDL fund), liquid stables, and a reserve fund. Ethena's growth strategy includes multichain expansion via LayerZero, product diversification, and partnerships with exchanges like Bybit.
The stablecoin market is evolving, with new players like Ethena and PayPal’s PYUSD joining the space. Stablecoins are increasingly used for trading, DeFi collateral, and payments, boasting over $30B in daily transaction volume. As competition intensifies, factors like distribution channels, yield sources, and product diversification will be key in determining market leaders.
Ethena’s focus on high-yield strategies and secure collateral management positions it for continued growth, while the stablecoin market overall is witnessing fierce competition from both crypto startups and traditional financial players like BlackRock and PayPal.
Rollup and Decoupled SVM: An In-Depth Analysis by Soon SVM
As blockchain adoption grows, Ethereum's scalability challenges persist. Optimistic Rollups, a popular Layer 2 (L2) scaling solution, improve throughput while maintaining security. Optimism is the flagship project, using an "optimistic execution" model that assumes all transactions are valid unless proven otherwise. This architecture allows for efficient transaction processing, reducing costs.
SOON’s Decoupled Solana Virtual Machine (SVM) introduces a new approach by separating the execution and consensus layers, enhancing flexibility, security, and performance. By decoupling SVM from Solana’s Tower BFT and Proof-of-History mechanisms, SOON achieves a high-throughput rollup framework compatible with various L1 networks and data availability solutions. This design enables SOON to achieve greater scalability, reduced costs, and improved performance for SVM rollups.
SOON plans to launch its mainnet on Ethereum using this Decoupled SVM, differentiating it from other SVM-based projects that rely on a forked SVM architecture. With support from Solana co-founder Anatoly Yakovenko and other prominent industry players, SOON is poised to accelerate SVM adoption, reducing costs by 10x and unlocking new use cases across multiple ecosystems.
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