Pay attention to these narratives

By EdgyNovember 9, 2023

Things are looking good. Bitcoin’s dancing around ~$37k, and we could see Ethereum hitting $2k soon.

No guarantees, but I do feel like we’ve hit the early stages of the bull market. It’s not too late to add to your positions. A few more weeks of up only, and we’ll finally be able to afford YouTube Premium.

Here’s what we got today:

  • Top narratives. What am I looking at?
  • Insider trading in DeFi. What to do about it?
  • Is the bull market here? What does the stablecoin market cap tell us?
  • Around the web. $PRISMA is live on Ethereum mainnet, Notional V3 is live on Arbitrum, Kraken might launch its L2, and more.

Today’s email is brought to you by Kelp DAO – the DAO for rsETH LRT.

Here’s your Edge 🗡️!


What am I looking at?

Pretty graphs and lines in a colorful background.

Liquidity’s starting to enter the market. If you want to maximize your profits, you need to stay on top of narratives.

Here are some narratives that I’m paying attention to and why.

Arbitrum Season 2.0

We’ve covered the Short-Term Incentive Program (STIP) several times in this newsletter. But here’s the TLDR in case you’ve missed previous editions: they’ve distributed ~50M $ARB to ~30 projects. These, in turn, will be distributed to users of these projects over the next three months.

Think of it as rocket fuel for the entire ecosystem.

STIPS already causing a ton of activity:

  • TVL has risen from 2.433B (Sept 1) to 2.853B.
  • L2 with fastest growing TVL. 1-month TVL change is +14.94%.

But there are several other catalysts for Arbitrum too:

  • $ARB staking. Users can stake $ARB and get a minimum of ~10% APY in $ARB.
  • Stylus upgrade. This will enable deploying programs written in popular programming languages, such as Rust and C++, to Arbitrum.
  • EIP-4844 upgrade. This Ethereum upgrade will make it cheaper to operate rollups. Aka, more profit for ArbitrumDAO.

​So, the $ARB ecosystem is primed to pump. Finding and entering quality projects on Arbitrum could be a great strategy for gains.

Some of the tokens on my radar that benefit from STIP are $GMX, $RDNT, $JOE, $Grail, and $FXS.

Cosmos ecosystem

I haven’t talked about Cosmos in a minute. But recently, they’ve come back on my radar. In particular, the following two projects:

#1 Kujira. This is a Cosmos L1 focused on finance. They’ve built quite a few products including their own stablecoin, USK, and FIN, a 100% onchain orderbook dex.

They experienced remarkable growth in 2023. On January 1st, they only had USD 3.51M in TVL, but now TVL sits at USD ~71M. The price is also pumping. It is up 252.5% on the monthly and 66.2% on the weekly.

#2 Injective. Another Cosmos L1 built for finance. Recently, their token has been pumping like crazy. INJ is up 644.9% on the yearly, 127.8% on the monthly, and 40.2% on the weekly.

While ETH layer 2s are getting plenty of attention, don’t ignore what’s happening on Cosmos and Solana.


A large chunk of money in crypto is chasing crypto returns. And a lot of degen investing is basically gambling. So, crypto gambling protocols have huge potential.

Rollbit is the market leader in the GambleFi space. And they’ve experienced huge growth in 2023. According to their website, 24-hour casino revenue is estimated to be more than one million USD.

While Rollbit is the market leader, there are plenty of beta play opportunities. The WINR Protocol is an interesting beta play. It offers infrastructure and a liquidity pool to build games and casinos using the WINR Engine. They also plan to launch WNR Chain, a dedicated GambleFi L3 chain on Arbitrum.

AI Narrative

November 6th was OpenAI’s Dev Day. They made a ton of announcements and everyone was paying attention. Obviously, alongside these, AI-related tokens pumped. A few AI tokens that performed really well are:

  • $TAO – 92.4% in the last 14 days and 183.8% in last 30 days.
  • $IMGNAI – 32.2% in last 14 days and 162.4% in last 30 days.
  • $FET – 23.2% in the last 14 days and 81.9% in last 30 days.

More AI conferences are coming up. So, this momentum may last a little longer. However, rather than fundamentals, this narrative is heavily driven by hype. For example, $GROK is a memecoin that’s trending because of the new xAI released by Elon.

​I view every AI-related token now as a meme coin, so be careful.

There are other narratives that I haven’t covered here. RWA, Telegram bots, Solana, LSDfi, GameFi, etc. Remember, you don’t have to chase every narrative.

You can focus on fewer narratives but make high-conviction bets on those. Aka, concentrate to grow.

Together With

Introducing Liquid Restaking with Kelp DAO

Restaking has picked up momentum within the DeFi Space. Ethereum stakers can now get additional rewards by offering their staked Ethereum to services as security collateral/helping protocols bootstrap 🔥

Kelp is a collective DAO designed to unlock liquidity and higher rewards for restaked assets with a single liquid restaked token (for accepted LSTs) called rsETH

Liquid restaking aims to solve the current restaking challenges, including complex reward structures, high gas fees, liquidity constraints, and discovery of suitable node operators, amongst other hurdles

rsETH can be minted against LSTs accepted as collateral on EigenLayer – it also allows for fractional ownership of staked assets with composability within the DeFi ecosystem 👀

Currently, on testnet, there are many milestones ahead in Kelp’s rsETH journey, including AVS and Operator Partnerships, Audits and of course, Mainnet Launch 🚀

Interested in getting higher rewards for your restaked assets?

Follow rsETH’s journey on Kelp DAO’s Twitter now!

Ask Edgy

What can be done about insider trading in DeFi?

Information flow example

Insider trading is rampant in crypto.

While it is clearly illegal in TradFi, DeFi is in a legally gray area. Since there’s an information flow chain, you’re at a disadvantage if you’re at the bottom of the food chain.

What is the information flow chain? Some people receive updates and information about projects much faster than others. This gives them an advantage. Here’s a standard information flow chain:

  • Team and insiders
  • VCs and seed investors
  • Coders and onchain analysts
  • Discord, Telegram, and forums
  • Crypto Twitter and newsletters
  • Wider media

Since the team and investors have very early access to any information, many worry they’ll trade against retail using that information.

But there are only two scenarios in which insider information becomes a factor.

Scenario #1: there’s an unknown negative catalyst, and you should exit the position ASAP. For example, a key person gets arrested in China (Actually happened with Multichain this year).

The solution here is to always monitor the whale wallets of a project. Especially those related to the team and investors. Your spidey senses should light up when you see significant dumping from these wallets. Something negative might be heading your way.

Also, for these kinds of negative catalysts, you should always factor it in your own risk analysis. You should have accounted for keyman risk from the beginning for the given example. In the DEER framework we implemented in the DeFi 2nd Brain, we critically evaluate the project team in the Evaluate phase.

Scenario #2: there’s a positive catalyst and you should be stacking. This isn’t actually as big of a concern as you might think.

Crypto markets are really inefficient. For most positive catalysts, even once they are announced on Discord and forums, it’ll take some time for price action to be affected. Take Frax Finance for example. They’ve shipped a ton: from sFRAX to FraxBonds. They’ve even announced a Layer2. But $FXS price has barely moved.

Or we mentioned Kujira earlier. The TVL has been going up all year, but the price has only started to catch up.

Whale wallet-watching is helpful in these instances as well. If you see insiders accumulating, it might mean bullish news.

The key here is to focus on what is within your control. And the transparent nature of DeFi gives you a lot more areas of control. In many ways, DeFi investing > TradFi investing.

Chart of the Week

Is the bull market here?

Stablecoin MC chart.
Source: DefiLlama

The stablecoin market cap is a leading indicator of the bull market.

We’ve explained this rationale before, but here’s the TLDR in case you missed it: increasing the stablecoin market cap indicates that new money is entering the crypto ecosystem. And new money is necessary for a crypto bull market to happen.

The above chart tracks the stablecoin market cap (pink) and the DeFi TVL (blue).

The stablecoin MC peaked in May 2022. Then, Terra Luna collapsed and the bear market started. From that point on, the stablecoin MC started shrinking. It eventually bottomed in August 2023 at around ~123 billion.

The stablecoin MC has been stagnant ever since. This indicates that everyone who wants to leave has already left. Only the true believers remain. So, we can assume that the market cycle bottom is over.

But, is the bull market here? The stablecoin market cap isn’t clear on that. We still only have ~$125 billion in stablecoin market cap. This isn’t a significant increase since we now have a safe >5% APR on DAI and FRAX.

DeFi TVL is on an upward trend in the medium term. BTC has recently pumped due to the BTC spot ETF speculations. And the crypto wealth created by this is slowly trickling down to alts and DeFi.

So, to answer the question, the bull market seems near. But this isn’t 100% confirmed just yet. We need one more push, anything from a BTC spot ETF to actual BTC halving.

However, we feel confident that the cycle bottom is over. And so this is the time to accumulate your crypto and stables. These current prices might be the lowest you’ll see for some time.

🚀 DeFi Catalysts

GMX has started the incentive program for GMX V2. Over 12 weeks, 12 million $ARB tokens will be distributed.

Prisma Finance‘s governance token, $PRISMA is live on Ethereum mainnet. Prisma is a LST-backed CDP stablecoin.

Convex Finance has expanded to include $PRISMA. Users will get $cvxPRISMA in exchange for permanently locking $PRISMA. They have >50% of $PRISMA.

Yearn Finance also introduced yPRISMA. Users will have the option to lock their airdrop to Yearn, minting yPRISMA 1:1.

Rage Trade introduced Rage V2. It is a perp aggregator. You can trade across multiple perps on multiple chains with a single tap.

Butter Finance is a meta-governance and yield-boosting platform for Pancakeswap’s upcoming veCAKE model, like Convex for veCRV.

Render Network, the world’s leading decentralized compute network, has migrated its core infrastructure from Ethereum to Solana.

Pyth Network unveiled its retrospective airdrop. Anyone who has used any dApp that used Pyth Network is eligible for airdrop. Even you probably are.

SushiSwap is discussing the redesign of the new $SUSHI tokenomics. It can potentially give new energy to the protocol.

Aragon Association (AA) is dissolving. All token holders can redeem ANT at a fixed rate of 0.0025376 ETH / ANT.

Aave market is now live on the Gnosis chain. It’ll be a new market for Aave and a more diversified ecosystem for Gnosis.

Notional V3 is live on Arbitrum. It enables fixed & variable lending & borrowing, and leveraged yield strategies.

Velodrome Relay is live. It allows users to maximize their $veVELO by automating the process for voting and compounding rewards each week.

Synapse Protocol announced modular bridging. Synapse X can route transactions through external pools. It’ll allow wider stablecoin support and more efficient routes.

📰 Industry News

Binance announced a self-custody web3 wallet that works within the Binance app.

Kraken, a leading crypto exchange, is considering building its L2 chain. They’re considering different tech-stacks including Polygon and zkSync.

ChainLight had uncovered zkSync Era’s ZK-Circuits a critical vulnerability that can allow a malicious prover to produce invalid proofs.

Nil Foundation introduced =nil. It is a zkRollup that securely scales Ethereum to 60,000+ TPS through zkSharding.

Near Foundation and Polygon Labs have announced a collaboration to to build zkWASM. It’ll allow any WASM chain to prove on Ethereum and have ETH L2 security.

🧠 Twitter Alpha

  1. GambleFi thesis: WINR Protocol.
  2. An introduction to Gammaswap.
  3. Macro update: Euro-zone projecting sub 2% inflation.
  4. The next phase of mobile DeFi: PWA Trading Terminals.
  5. An attempt to take free money from DAO: Arbitrum Coalition Proposal

😂 Meme