Welcome to this week’s market recap! It’s been a dynamic period in the crypto space, with significant developments across Layer 2 scaling solutions, intriguing news around major protocols, and market shifts due to external political events.
Market Performance Overview:
- Bitcoin: Trading at $63,309, up 0.15% in the last 24 hours.
- Ethereum: Valued at $2,581.21, up 0.42%.
- BNB: Priced at $593.76, with a 1.33% pump.
- Solana: Trading at $145.91, down 1.64%.
- XRP: At $0.591, down 1.72%.
Let’s dive in:
1. Transaction Ordering Policies & Value Accrual in Layer 2 Networks
Layer 2 tokens are evolving beyond simple governance mechanisms, with protocols now looking to internalize Maximum Extractable Value (MEV) and distribute it more fairly. Major L2s like Arbitrum, Optimism, and Polygon are leading this charge. Over $3.9B in atomic arbitrage volume and $400M in sandwich attacks have already been recorded. The comparison of mechanisms like Arbitrum’s Timeboost, Optimism’s Priority Gas Auction, and API3’s OEV Network highlights the growing focus on transaction ordering policies to minimize harmful behaviors while maximizing income streams for participants.
2. Bitcoin Miners Face Revenue Challenges
Bitcoin miners are increasingly reliant on block subsidies, with only 1.6% of their revenue coming from transaction fees. This has raised concerns about the sustainability of miner income as network fees remain low, signaling potential challenges as the next halving approaches.
3. Base Shatters L2 Transaction Records
Coinbase’s Layer 2 solution, Base, continues to dominate the scaling space, recording over 4.5 million transactions in a single day. Its rapid growth solidifies its position as a leading player in the L2 ecosystem, proving that demand for efficient scaling solutions remains high.
4. Ethereum Staker Revenue Hits Six-Month Low
Ethereum’s daily staker revenue plummeted to $5.44M, its lowest since February 2024. The drop reflects a growing concern among stakers about diminishing returns as network congestion eases and the staking ecosystem matures.
5. Cryptokitties Resurrect with NFT Surge
Cryptokitties, one of the original NFT projects, saw an 800% spike in sales, thanks to the launch of its sub-project, “Eggs.” Over 3,000 NFTs were minted in just 24 hours, sparking renewed interest in a project many thought had passed its prime.
6. Avalanche’s User Base Decline
Avalanche’s active addresses have dropped to a 12-month low, signaling a steep decline in user engagement. Despite processing 150,000 transactions daily, the network faces a challenge in maintaining a robust, decentralized user base as competition in the Layer 1 space intensifies.
7. Crypto Markets React to External Events
Bitcoin and Ether saw a 4-5% drop this week amid reports of a second assassination attempt on former President Donald Trump. While it’s unclear if the two are directly linked, the event coincided with heightened volatility across the crypto markets, with traders bracing for potential implications.
8. WalletConnect Airdrops 185M Tokens
WalletConnect, a popular Web3 protocol, announced the airdrop of 185 million Connect Tokens (WCT) on Optimism’s OP Mainnet. The project aims to reward early adopters and solidify its presence as a key player in the decentralized wallet space.
9. Trump-Backed World Liberty Financial Unveils WLFI Token
World Liberty Financial, a DeFi project backed by Donald Trump, has unveiled plans for its WLFI token. While the token will primarily serve as a governance mechanism, its participation is limited to accredited U.S. investors due to regulatory uncertainties.
10. BlackRock’s Bitcoin ETF Sees Positive Inflows
After a three-week drought, BlackRock’s spot Bitcoin ETF saw its first positive inflows, totaling $15.8M. This marks a pivotal moment as institutional interest in crypto continues to grow despite recent market volatility.
11. Polygon Faces Upgrade Hiccups
Coinbase reported issues with Polygon transactions following a recent network upgrade, causing delays. While the platform has assured users that funds are safe, the disruption highlights the risks associated with major blockchain upgrades.
12. Solana Smartphone Hits 140,000 Presales
Solana Mobile’s latest crypto smartphone, “Seeker,” has reached over 140,000 presales, demonstrating strong demand for blockchain-native mobile devices. The Seeker is the cheaper successor to the popular Solana Saga and is poised to bring more users into the Solana ecosystem.
That’s it for this week’s Bestla VC market recap! Stay tuned for more updates as we continue to monitor the ever-changing crypto landscape. See you next week!
