A weekly recap of the largest crypto events and narratives, with an extra dose of insight.
Here’s what we have for you:
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Coinbase goes big
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friend.tech is dead
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Maple funding to enter growth mode
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Crypto UX takes a leap with instant payouts
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Farcaster migrates to Optimism, seems like many are optimistic on Optimism
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Tornado cash and where privacy stands
Coinbase <> Base <> OP
Base this, base that, Coinbase is absolutely based. Base is committing to decentralisation, and that is something crypto desperately needs right now. Currently, most optimistic rollups don’t have a functional fraud-proof system, which means that if devs want to rug or at least stop capital from leaving their ecosystem, they can, to some extent. Optimistic rollups also currently use a single sequencer, which means they can censor your transactions.
As part of its commitment to decentralisation, Coinbase will move to a 2-2 contract upgrade multisig structure, and a 1-2 challenger key structure. Basically, it means that stuff like governance and upgrade keys will be controlled by multiple independent parties.
As a result of Coinbase’s commitment to the OP stack, they are getting a sweet deal of 2.75% of the OP token supply. That’s a staggering $180M at today’s prices. In return, the Optimism collective will receive 15% of Base sequencer profits or 2.5% of Base’s total revenue, whichever is more.
That’s not the only move Coinbase has been making. Coinbase announced that they took an equity stake in Circle, the company in charge of minting USDC. With this announcement, it was revealed that USDC would launch natively on Base, Noble, Optimism, and three other blockchains.
I know us degens don’t really like touching stocks, we only like our shiny tokens. But I genuinely believe Coinbase could be one of the largest winners in the coming years, between their centralised CEX product, their decentralised network Base, and everything else they have a stake in such a Circle. They are setting themselves up to be a dominant powerhouse that touches every facet of crypto imaginable.
The Faster They Rise, The Faster They Fall
Looks like it took a grand one week for the friend.tech party to be over. Acitivity on the social platform has dwindled down by over 90% since its peak one week ago.
TVL has stagnated, # of new users is less than 1,500 compared to the cumulative users of 120K, and the number of transactions has dropped from 216K at its peak to a shadow of that at 23K today.
However, friend.tech has recently announced that you can now send photos to your key holders. Of course, the most natural use case for that was for OnlyFans creators to onboard on the platform. The most obvious way to use this is, you must hold a certain number of keys for free access to a creator’s OnlyFans, or the creator could use friend.tech as a funnel to their OnlyFans profile. Anyways, I hope that eventually crypto use cases eventually expand beyond speculation and I guess now products like OnlyFans.
Maple Closes $5M Funding Round
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Maple Finance, an onchain capital market protocol, has just raised a $5M round. Maple Finance offers cash management solutions for DAOs, and also offers digital asset lending.
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The protocol announced that it is officially entering growth mode, with an upgraded token design including fee rebates and delegate alignment, along with commercial growth initiatives and continued investments in proprietary technology.
Instant Payouts
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Beam, a crypto to cash product, has announced instant payouts. With this new product, you can transfer crypto straight from your Metamask straight to a debit card.
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Users no longer have to wait for bank processing, and all of this for no additional fees. I believe these are the type of products crypto needs to reach mass adoption, as the onramping/offramping process is still way too cumbersome for the average joe.
Farcaster Migrates To Optimism
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Facaster, a decentralised social media protocol, is migrating from Ethereum mainnet to Optimism. Another app joins Optimism. In recent months, we’ve seen a flurry of activity from apps either joining Optimism or launching a rollup on the OP stack.
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It genuinely seems like Optimism is dominating right now and having project after project join its ranks. If this momentum continues into the next bull market, I think we can expect to see Optimism significantly outperform Arbitrum.
The US keeps clowning
Last year, the Treasury Department added Tornado Cash to its OFAC sanction list. This means that going forward, anyone using Tornado Cash is effectively doing an illegal action. Something being put on the OFAC sanction list likely means that whatever that thing or entity is, it’s helping the enemies of the US do not so good things. In this case, like helping North Korea launder money after they exploit crypto bridge after bridge.
In shocking news, the Department of Justice arrested Tornado Cash co-founder, Roman Storm and charged him with helping to launder $1B. The arrest was made on the basis that, “While publicly claiming to offer a technically sophisticated privacy service, Storm and Semenov in fact knew that they were helping hackers and fraudsters conceal the fruits of their crimes.”
This seems particularly wild to me. I highly doubt Roman Storm was talking to Kim Jong Un and telling him, hey man, if you ever want to wash some money, you can use this service I built. In addition, I also doubt Roman Storm ever sold Tornado Cash as a platform where criminals could use it to launder funds.
If I had to choose to compare Tornado Cash to something in the physical world, perhaps gunswouldl be an apt choice. One can use guns for both legal purposes such as self-defense, but also use it illegally to murder someone in cold blood. Does that mean guns are inherently bad? No. Does that also mean any gun manufacturer should be arrested? That would be chaos.
Privacy is a fundamental human right, although the government and financial institutions must also fulfill their goals of stopping terrorist acts, denying criminal activity, and keeping the peace. I suspect that these two fundamental clashing forces will continue to come together in the next few years as governments continue to want to regulate crypto, while devs continue to pursue the original vision of crypto as a decentralised permissionless financial system.
