Yesterday in Crypto - Issue #28

Read time: ~7 minutes

The crypto world is abuzz with a Bitcoin wallet that's been on a rapid accumulation spree.

🔍 Climbing the Ranks

In a mere three months, an unidentified Bitcoin address has soared to become the third-largest BTC holder, accumulating over 141,452 BTC, translating to billions in value.

🤔 Who's Behind the Curtain?

While the true identity of this wallet remains shrouded in mystery, the community is rife with speculation. Some are pointing fingers at giants like BlackRock or the crypto exchange Gemini, though no concrete evidence has surfaced, and both have stayed silent. Personally, based on nothing but speculation, I think it’s Blackrock. Why? 3 letters: E. T. F.

📊 The ETF Connection

With a surge in companies applying for spot Bitcoin ETFs, there's a growing need for physical Bitcoin to back these potential offerings. This mysterious accumulation could be a strategic move to cater to this anticipated demand, ensuring ample Bitcoin supply when these ETFs get the green light.

📌 The Bigger Picture

Large accumulations can sway Bitcoin's market dynamics. If the speculation holds true, this could be a strategic play in anticipation of the next big wave in the crypto industry - the approval of spot Bitcoin ETFs.

Ethereum is often hailed as the world's programmable blockchain, but what really is Ethereum? Let's break it down:

🔍 What is Ethereum?

• Ethereum is a decentralized, open-source blockchain system that features smart contracts. Think of it as a global computer where developers can build and run applications.

• Unlike traditional apps, Ethereum apps are decentralized, meaning no single entity has control over them. This ensures transparency and trustworthiness.

🌏 Ethereum's Vision:

• Banking for All: Ethereum aims to provide financial services to those without access to traditional banking. All you need is an internet connection.

• An Open Internet: Ethereum promotes a free and open internet where anyone can interact, build, and share value without intermediaries.

• Censorship Resistance: No government or company controls Ethereum, making it a platform where users can transact freely without fear of censorship.

📜 Smart Contracts: The Building Blocks

• Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They automatically execute actions when certain conditions are met.

• These contracts are immutable, meaning once deployed, they can't be altered. This ensures trust as users know the contract won't change arbitrarily.

💰 Ether (ETH): The Fuel of Ethereum

• Ether is Ethereum's native cryptocurrency.

• It's not just a digital currency - it's the fuel that powers the Ethereum network.

• You need to pay a fee each time you interact with the network. This fee is paid in ETH (Ether). Some of it is burned, and some is used to compensate participants who perform computations and validate transactions.

🔄 Recent Developments:

• Ethereum recently transitioned from a Proof-of-Work to a Proof-of-Stake consensus mechanism, significantly reducing its energy consumption.

• This transition, known as "The Merge," has shifted block proposing and consensus responsibilities from miners to validators. Validators now receive rewards for these activities, enhancing the network's security and efficiency.

🎮 Ethereum's Impact:

• Ethereum has empowered creators, with artists, musicians, and writers earning around $3.5 billion in 2021 alone.

• It's transforming the gaming industry with "play-to-earn" games, rewarding players for their time and skills.

• In times of crisis, Ethereum has provided financial agency to those facing political repression or economic hardship.

🔗 Ethereum vs. Bitcoin:

• While both are decentralized and allow peer-to-peer transactions, Ethereum's programmability sets it apart. It's not just a payment network but a platform for decentralized applications, from financial services to games.

• Bitcoin and Ethereum can and will co-exit. They are not competitors, rather a synergistic, symbiotic relationship that will usher us into the future of finance.

For those intrigued by the possibilities of a decentralized future, Ethereum offers a vast playground with endless opportunities.

EigenLayer is worth your attention. Here's what you need to know:

🚀 What's Happening?

EigenLayer, a middleware built on the Ethereum network, offers protocols the ability to tap into Ethereum's robust security layer without the need to establish their own validator set. This innovative approach allows for increased protocol security, flexibility, and capital efficiency. This essentially means other protocols can rent security from Ethereum.🔍 How Does Restaking Work?

Restaking is a method that lets users obtain extra rewards on ETH already staked on the main Ethereum blockchain. With EigenLayer, users can restake their assets by depositing liquid staking tokens, such as lido stETH (stETH), rocket pool ETH (rETH), and coinbase-wrapped staked ETH (cbETH).

💡 Quick Refresher:

• EigenLayer: A middleware on Ethereum that commoditizes decentralized trust, allowing protocols to leverage Ethereum's security.

• Restaking: A method to earn additional rewards on already staked ETH. Users can stake their ETH across multiple protocols, maximizing rewards.

• Liquid Staking Tokens (LSTs): Tokens like stETH, rETH, and cbETH that represent staked ETH and can be used for restaking on EigenLayer.

📈 Recent Developments

EigenLayer recently made headlines with a whopping 207% surge in its total value locked (TVL) after increasing its liquid restaking cap to 100,000 ether (ETH). This cap was filled in mere hours, with the TVL jumping from $78 million to $238 million. The platform's restaking protocol, which was launched in June, has been a hit, allowing users to earn additional rewards on their staked ETH

🤝 Behind the Scenes

EigenLabs, the brains behind EigenLayer, secured a significant $64.5 million in funding earlier this year. This included a $50 million Series A round led by Blockchain Capital, highlighting the industry's confidence in the platform's potential.

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

“The blockchain does one thing: It replaces third-party trust with mathematical proof that something happened”

– Adam Draper - Venture Capitalist