Yesterday in Crypto - Issue #20

Read time: ~7 minutes

Coinbase's new Ethereum layer-2 network, Base, is making waves in the crypto community. Miss the launch news? We covered it HERE.

Since its mainnet launch on August 9, Base has seen a surge in activity, with daily active users hitting a whopping 136,000. Plus, there's been a significant influx of funds, with the total value transferred to the network now standing at $170 million.

Now, here's something interesting: many users are flocking to chains like Base, even if they don't have a native token. Why? Well, there's buzz about potential retroactive airdrops. In the crypto world, this means users could receive tokens in the future as a reward for their early involvement. It's a bit like getting a surprise bonus for being an early supporter.

Base isn't just about numbers; it's about community and innovation. Meme coins, those fun tokens inspired by internet jokes, have been trading like hotcakes on Base. And then there's Friend.tech, a cool new platform that meshes with Twitter, letting users trade "shares" in other users. However, it hasn't all been smooth sailing. A meme coin named BALD faced a setback, reminding everyone not to get too excited.

Still, with the total value locked in Base's DeFi applications reaching $72.83 million, it's clear that this platform is one to watch.

Circle, a big player in the crypto world known for its USDC stablecoin, is bracing itself for some stiff competition. They've pulled together a whopping $1 billion in reserves, as their CEO, Jeremy Allaire, shared in a chat with Bloomberg. Why? Well, they're prepping for any market hiccups and the growing challenges from tech giants and the old-school finance world, especially with big names like PayPal diving into the stablecoin game.

Jeremy seems pretty upbeat about what's coming. He believes that as more companies, from online payment platforms to traditional finance bigwigs, jump into crypto, it'll only pull more into the mix. But it's not all sunshine and rainbows for Circle. Their USDC stablecoin circulation has taken a hit, dropping from a peak of $45 billion at the start of 2023 to $26 billion by mid-year. Some of this dip is because Binance, a major crypto exchange, decided to back its own stablecoin instead of USDC, among other market shifts.

Even with these challenges, Circle's not doing too shabby. They raked in $779 million in the first half of 2023, beating their entire 2022 revenue. But they've lost some ground in the stablecoin race. Still, Jeremy's looking at the bright side, focusing on the ups and downs of the market. And Circle's not just sitting around; they've rolled out a new service for developers, a wallet API, hoping to make a splash in the Web3 world.

Imagine being able to split a valuable painting into a thousand pieces and then selling each piece to different people. Each person doesn't get a physical fragment of the painting, but they do get a digital proof of their ownership. This concept, in the world of digital finance, is known as "tokenization." It's a process where real-world assets (RWA), be it real estate, art, or even company shares, are converted into digital tokens on a blockchain.

The beauty of tokenization lies in its ability to divide assets into smaller, more affordable units, making them accessible to a broader range of investors. For instance, if a piece of real estate is tokenized, instead of buying an entire property, you can buy a fraction of it in the form of digital tokens. These tokens represent a part of the ownership of the property. As the property's value goes up or down, so does the value of your tokens.

RWA protocols have been exploding - the category has moved into 10th place in combined Total Value Locked at over $1 billion.

Source - DeFiLlama

More impressive is the speed in which this happened. Here’s the timeline of the category Total Value Locked:

Much of the activity has occurred in the last few months.

Tokenization is revolutionizing the way we invest and trade. By turning tangible assets into digital tokens, it's creating a more inclusive financial system where more people can participate. It offers increased liquidity (making it easier to buy or sell assets), enhanced security through blockchain technology, and the potential for a global marketplace where assets can be traded 24/7.

Here are the top RWA protocols according to DeFiLlama

As the world continues to embrace digital transformation, tokenization is set to play a pivotal role in shaping the future of investment. Keep an eye on this category during the next bull market and beyond.

That’s all for today. We’ll see you tomorrow.

“[Bitcoin] is a remarkable cryptographic achievement… The ability to create something which is not duplicable in the digital world has enormous value… Lot’s of people will build businesses on top of that.”

– Eric Schmidt, Former CEO, Google