Inflation is officially at 9.1% - the highest in 40 years.
I'm not sure if the "bottom" is in or not, but I don't mind buying at these prices. Too many people try to time the bottom perfectly and miss buying altogether. That's why I recommend dollar cost averaging, and saving your brainpower. (Not financial advice of course)
In This Week's Email:
• Starkware is coming. The most anticipated ETH Layer 2 has announced a token!
• Su Zhu has emerged. Su (3 Arrows Capital) has broken his silence after going MIA for a few weeks.
• A free resource. Article recommendations? My favorite books? It's all here!
Let's dive in!
“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.” - Charlie Munger
StarkNet is Coming
Ethereum is the most dominant layer 1 right now. The main problem is scalability. Remember how Ethereum Gas fees were through the roof earlier this year?
(FYI: "the merge" does not solve scaling issues. It transitions Ethereum from Proof of Work -> Proof of Stake.)
One way that Ethereum plans to address its scalability is through Layer 2 solutions. I'm sure you've heard of Arbitrum and Optimism. Well, every hardcore Ethereum user has been anticipating Starkware.
What's so Cool About StarkNet?
There's already Arbitrum, Polygon, Optimism, and other Layer 2 scaling solutions. What's the big deal about Starknet?
• Starknet is ZK-roll up (Zero knowledge). Most L2 solutions in the market are based on Optimistic Rollup technology. For more details on the differences, watch this video.
• Some people view Optimistic Rollups as a temporary solution, and that ZK rollups (like Starknet) are the end game due to better technology. ZK Rollups are way more complex and will take longer to implement comapred to Optimistic.
• The co-founder, Eli Ben-Sasson, was a founding scientist at Zcash.
• Starknet reached an $8B valuation following their latest raise in May.
They just announced a Token!
(You could argue that Su Zhu forced their hand to announce it. More in the next section)
In a series of articles yesterday, they formally announced that they're launching a Token.
• 10 Billion tokens have been minted. This is not a fixed circulation supply and will increase over time.
• They want StarkNet to become a public good like the internet.
• Tokens wills be used for transaction fees, staking, governance
• Starknet uses ETH for fees, but it will be replaced by the new token.
All tokens allocated to Core Contributors and Investors will be subject to a 4-year lock-up period, with linear release and a one-year cliff.
How Do You Get Starknet Tokens?
Well, they've had the benefit of learning from how Optimism and other protocols handled airdrops. Basically, they do not want people trying to game the system to get airdrops.
1. They're mainly allocating towards developers & software creators.
2. They're saying to just use Starknet without expectations of getting a token. They could allocate some towards early adopters of Immutable, DYDX, and other protocols that used Starkware.
Some people aren't happy with the token allocation distribution. Almost half will be allocated towards investors / core contributors. Some people feel that early adopters & users should get more.
Read More: Part 1, Part 2, Part 3
📰 The Fast Five
1) Su Zhu has Emerged. Since the 3AC collapse last month, Su disappeared from Twitter. Not only that, but him and his partner Kyle haven't shown up to court appearances in NYC. On July 12th, he made his first tweet in weeks.
He has accused liquidators of failing to exercise a Starkware token offer by July 5th. Warrants are an informal agreement that's not registered with the SEC. Think of them like an IOU that you have to claim by a certain date. The liquidators were supposed to convert the warrants to Tokens. They didn't and potentially 8 figures worth of value was lost.
Maybe they wouldn't have lost those tokens if these guys didn't ghost everyone for the past few weeks. He's pointing fingers at everyone else but himself.
2) Celsius Declares Bankruptcy. We all kinda saw this coming as soon as they froze customer withdrawals on June 12th. Right now they had $167m of cash on hand. Unfortunately, customers will have to file a claim to get some of their money back.
Remember, not your keys, not your coins. We saw what happened to bitcoin held on the Mt.Gox exchange back in 2014. In this cycle, it's people who held their coins with CeFi.
3) A Report From Beets. Beets is a balance forker on FTM. They just released a detailed report about the metrics and financial of their protocol. They've going multi-chain and deployed to Optimism (L2 on Ethereum). They have some interesting metrics such as Revenue to Emissions ratio and Revenue to TVL ratio.
It's always a good sign when a protocol is transparent. Really interesting to see how a protocol handling these turbulent times.
4) Uniswap suffers Phishing Attack. Hacks stole around 7,500 ETH in a phishing attack. There was some drama / confusion because CZ (Founder of Binance) called it an exploit.
Exploit = An exploit is a method or a technique used to take advantage of a flaw or a vulnerability in the code.
Phishing = Social engineering. It's when someone sends you to a fake site, you fall for it, and connect your wallet.
What happened? Attackers send a fake token called UniswapLP. They then sent people to a website to swap the fake token for actual UNI tokens. Once victims connected their wallets, the attacks can drain their funds through smart contracts.
Phishing attacks are getting more sophisticated. My advice.
a) create a separate email via Photonmail for all your Crypto related activities
b) Whenever a protocol is giving away something, wait. Cross check and see if it's legit or not. Remember, official Twitter / discords get hacked all the time. So even if it's from an "official source", you should be suspicious.
5) Gamestop Launches NFT Marketplace. It sold around $2m on its first day. With a cut of 2.25% commission, that's roughly $44,500. To put this into perspective, it has surpassed the entire revenue of Coinbase NFT Marketplace within a few days of launching.
I'm quite excited for this news even though I don't pay much attention to the NFT space. Gamestop's still a household brand with 4,500+ stores. This is a small step towards real world adoption. Not everyone can figure out NFTs / wallets. Maybe their stores can help with onboarding. Then again, they couldn't even figure out what was wrong with my PS3 back in the day.
What Edgy Recommends
I sent you guys a survey a while back, and one of the top requests was a list of all my recommendations in one spot.
So I've been working on a project over the past few weeks.
It's a curated list of all my recommendations in DeFi:
• Skill Trees & Reading Material for Beginners
• Recommended Books / Podcasts
• Recommended DeFi Tools
• My Investing Principles
• My Twitter Threads
• & more to come
This is a Beta version. I still have a lot of work to do on this before I'm satisfied. I released it because I don't want to fall into the perfectionism trap!
Check it out at The DeFi Edge Free Resources.