Interesting. BTC’s at $52k and ETH’s at $2800.
This is the highest Crypto has been since 2021, and yet retail is barely interested. Just wait until your IRL friends realize what’s happening and start FOMO’ing into the markets.
We’re going to Valhalla, my friends.
Here’s what we got today:
- Hot narrative. Modular blockchains and airdrop ve(3,3).
- Solana strategy. How to farm Parcl airdrop?
- Chart of the week. Farcaster revenue has crossed $600k.
- Around the Web. StarkNet announced $STRK airdrop, Dencun upgrade finalized for March 13th, and more.
Here’s your Edge 🗡️!
Modular Blockchains and Airdrops
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The early bull is usually known as BTC season, but there’s another narrative that has also been performing really well.
It is the “modular blockchains” narrative – I highlighted the potential of this over a year ago on Twitter.
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This encompasses projects like $TIA, $DYM, and $ALT, as well as token-less projects like EigenLayer. Their high prices are said to be because of “Airdrop ve(3,3)”.
Let’s explore what it means.
What are modular blockchains? A blockchain has different functions: for example, settlement, consensus, execution, and data availability. Early blockchains tried to do everything at once, so they are called monolithic blockchains.
But the new generation of chains decided to specialize instead. Some focus on data availability, others focus on settlement, etc. Each chain focuses on a specific “module” of the blockchain. Kind of like an orchestra. Some are the violin, some are the piano, and so on.
These chains are called “modular blockchains.”
Technically, Ethereum and L2s fall under this category. But, the market views these as a separate ecosystem. So, here are the top projects in the modular chains category:
- Celestia ($TIA): This focuses on being the “data availability” layer. Other chains can cheaply post data and make it available to everyone.
- Dymension ($DYM): This tries to be the “settlement” layer for RollApps. It aims to offer security, liquidity, and connectivity. You can read more about them here if you would like.
- Altlayer ($ALT): This enables the launching of “restaked rollups.” In short, they are better rollups and solve a few issues with the current rollup ecosystem. If you want a longer explanation, here you go.
EigenLayer also fits into the modular blockchain narrative. But as it doesn’t have a token, it wasn’t included in the above list.
These projects are relatively new. And yet, they have massive valuations. The Fully Diluted Valuation (FDV) of $TIA is ~$19.3 billion. The FDV of $DYM is ~$8.1 billion. And $ALT’s FDV is ~$4 billion.
These are not backed by any fundamental analysis. Let’s take Celestia for example. For Celestia’s tokenomics to be sustainable, it needs 65x data that is currently being posted to Ethereum. They might solve this in the future, but that’s a topic for another day.
So, how can we explain the massive FDV of these projects? Modular blockchains are a technical subject, so degens aren’t just aping based on memes like $PEPE and $DOGE.
Enter Airdrop ve(3,3). (3,3) was a Ponzi mechanism used by OHM in the last cycle. A similar mechanism is happening with these modular chains and airdrops.
Here’s the TLDR; Many chains will be built on top of these modular infra chains. People speculate that these new chains will airdrop tokens to the stakeholders of infra chains.
Now, the degen calculation makes sense. If $TIA’s price is $20, then the cost of staking 20 $TIA is $400. But if that qualifies you for a $1000 airdrop, then it becomes profitable to stake.
As a result, many degens are buying and staking $TIA and $DYM and hoping for an airdrop. This creates buying pressure in the market and pushes up the price. For now, this is a profitable strategy.
But you have to be cautious. This is a narrative based on airdrop speculation. Sooner or later, projects will stop aidropping tokens to infra chains. And when that happens, these prices will likely nosedive.
Another thing to watch out for is token unlocks. In October 2024, more than the existing circulating supply of $TIA will be unlocked to investors. And since they’re in massive profit, they’ll probably sell it.
As always in crypto, you can play the game if you understand the rules.
Final Double Your DeFi is here!
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Your last chance to get the most intense DeFi training is here.
Double Your DeFi is a 5-week, comprehensive program designed to teach you my DeFi investing systems. The next cohort will be in April 2024. And we have made a few improvements to give you the most bang for the buck.
- An Exclusive Airdrop Masterclass. Patrick will conduct A-Z on how to play airdrops. From discovering potential 5-figures airdrops to farm them with multiple wallets without risking being flagged as a Sybil attacker.
- Introducing the Airdrop Dashboard. The most complete, current, and step-by-step dashboard is designed to give you a hub to track every airdrop you want to farm. 2024 is the airdrop season, and we’re giving you the system to reap all the rewards with 0 effort.
- *New Module* DeFi Yield Strategies. We’ll be going into various DeFi yield opportunities that we’re seeing. Starting from beginner-friendly ones to more advanced strategies.
- *New Playbooks*. Taking profits and cutting losses, and trading psychology.
If you’re feeling unprepared for the bull market, this is like a hyperbolic time chamber that’ll get you up to speed.
If you’re feeling unprepared for the bull market, this is like a hyperbolic time chamber that’ll get you up to speed.
Join the Final Double Your DeFi →
Solana: Parcl Airdrop Strategy
Solana is currently one of the hottest ecosystems for airdrops.
In today’s airdrop spotlight, we wanted to cover another protocol rumored to release its token.
The protocol in question is Parcl. They have launched a points program; you already know what this means.
“Parcel” is part of the RWA sector, which has seen incredible growth during 2023.
I like protocols sitting at the intersection of multiple narratives. Parcl is at the intersection of Solana and RWA.
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What is Parcl?
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Parcl is built on top of Solana to trade the real estate market in a tokenized form. Its focus is mainly on US-based cities, but it plans to expand worldwide eventually.
Being tokenized means you can invest in real estate in a “fractionalized” way.
Like any other token, you can hold it in your wallet and trade it inside the Parcl index page.
Their current trading is tied to indexes representing the real estate market in a specific city. If you want to know more, we recommend reading their docs.
They had quite a run throughout 2023 with their TVL reaching $60 million. Whether the airdrop mania pushed this remains to be seen.
At the same time, we believe it’s not yet overfarmed, and being the first mover might yield great results.
Before the strategy
As you might imagine, most points are farmed by being active/participating in the protocol itself.
Parcl’s indexes are treated as any other asset.
You can long or short and the system allows you to use leverage. We always discourage using leverage as it increases the risk of getting liquidated.
Before you proceed further, make sure to:
- Open any indexes.
- Scroll down and pay attention to the right-hand side.
- You will see a link to click that says “Activate pts.”
- Click on it to activate your points.
From now on, you are eligible to gain points.
How to earn more points: The strategy
#1 Provide Liquidity to the platform (Safer)
By navigating to the menu on the left, you can “Provide Liquidity.” This is considered to be the easiest way to earn points.
LPs collect 70% of fees from the platform. This way, you can deposit USDC and earn yield and points on top of it.
Just so you know, this pool has a minimum lock-up period of 30 days.
#2 Long / Short any index (Riskier)
Holding a long or short position does earn points. But at the same time, it also exposes you to market fluctuations.
Some might consider having a Delta Neutral Position (the same long/short exposure). Unfortunately, this procedure was recently banned by the team.
End of story? This is probably not the wisest way to farm points.
Bonus Tip – Layer 3 quest
Layer 3 is a platform used by newer protocols to attract users in a more guided way.
Parcl released an official quest on their website, allowing you to earn additional points if you follow the quest’s steps.
1) Click here to learn more about the quest
2) Points Boost – If you enter the code “thedefiedge” you’ll get rewarded with a 5% points boost forever.
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Farcaster: The Return of SocialFi?
 Source: @pixelhack |
The above chart tracks Farcaster’s protocol revenue.
What is Farcaster? In short, it is a web3 social media protocol. Below is the slightly longer version if you are interested:
In web2, social media is primarily created and controlled by megacorps. X can steal your handle. Facebook can censor your posts. YouTube can take away access to your followers. Etc.
In contrast, in Farcaster users will have control over their accounts, data, and followers. It is like an email account. Users have control over their ID, data, and contacts.
And just like email, it has two parts: the protocol and the client. Farcaster is the protocol. Multiple clients are built for email, like Gmail, Outlook, and Apple Mail. Similarly, there are multiple clients on top of Farcaster. Warpcast is the leading Farcaster client.
This Farcaster documentation is a great place to start if you want an even more detailed explanation.
Now, let’s get back to the chart. It shows Farcaster’s daily revenue and cumulative protocol revenue.
Where does the revenue come from? Well,Farcaster isn’t free to use. Users have to pay ongoing fees for data storage. Right now, this storage fee is $5/year for 5,000 posts, 2,500 reactions, and 2,500 follows.
If you look at the cumulative revenue, you can see that users paid more than $630k to use a social media platform. So, there’s some product-market fit.
If you look closely, you can also see that adoption happened across three waves. The first one was in October 2023. The second one was between December 6th to 12th.
The recent wave began in January and peaked on February 5th. The primary catalyst for this wave was a new innovation: frames.
Frames enabled mini-apps as posts. (Well… technically, it’s more nuanced than that.) Now, users can mint an NFT, subscribe to a newsletter, or something else while scrolling through social media.
There were other reasons for the increased adoption as well:
- Channels created niche communities on Farcaster. Ethereum’s galaxy brain chads like Vitalik seem to have moved over there.
- Farcaster has its own ID system. The ID is basically a number assigned to you by the protocol. Those who got in early received smaller numbers. And these early IDs got airdrops. $DEGEN was airdropped to Degen channel members. Seeing this, many degens joined Farcaster to hunt Airdrops.
- And so, these Farcaster IDs became valuable. One of the IDs was sold for almost $7k USD in $ETH. So, the rush for Farcaster IDs likely played a role as well.
Do I plan posting on Farcaster? Dude. I’m overwhelmed with Twitter, this newsletter, and posting thirst traps on Instagram. I don’t have the bandwidth for Farcaster lol.
But that doesn’t mean that Farcaster is a fad. I think quite the opposite. There is going to be a successful web3 social media protocol eventually. And Farcaster is the leading candidate.
But, it is still early. There are competitors such as Lens Protocol. And the current wave of Farcaster adoption is cooling down.
Farcaster is having a new adoption wave approximately every two months. So, in a couple of months, you’ll probably hear about something cool happening with Farcaster. And it’ll probably have something to do with frames.
So, I’d recommend you create an account to mess around a bit. It’ll only cost you $5 and a bit of time.
🪂 Airdrop Alpha
StarkNet will enable $STRK claiming on February 20th. The launch is in a drama. VC can sell tokens 2 months after its available to retail. Also, many airdrop farmers didn’t qualify for the airdrop.
Pyth Network announced 2nd phase of its retrospective airdrop. Over 160 dApps will receive it. And the dApps will choose what to do with it.
Monarch, a gamified iteration of ERC-404 token, has announced airdrops for $WIF holders and $PANDORA multi-sig.
🚀 DeFi Catalysts
SushiSwap introduced Susa, a decentralized derivatives exchange built on top of Layer N, an Ethereum Layer 2.
Prisma Finance introduced $ULTRA. It’ll be a stablecoin backed by Liquid Restaked Tokens.
Sommelier Finance announced the expansion to Arbitrum. Their Real Yield ETH Vault is now available to Arbitrum users.
Cow Protocol is building the CoW AMM, the first MEV-capturing AMM. This new design will protect LPs from arbitrage bots.
Ondo Finance is expanding to SUI Network. Their premier tokenized US Treasuries product, $USDY, will be available on SUI.
Magic Eden will launch on Ethereum on February 27th in collaboration with Yuga Labs. They are trying to protect creator royalties as well.
Tapioca DAO has introduced $TAP, its ecosystem token. They will do an “option airdrop”. Recipients can buy $TAP at 25% to 50% against the market price of $TAP at the time of distribution.
📰 Industry News
Ethereum has confirmed the date for the Dencun upgrade to be March 13th. It’ll make it cheaper for rollups to use Ethereum. And can be a catalyst for $ETH & Rollups.
Polygon Labs introduced Type 1 prover. It can transition any EVM chain into validiums on Ethereum. It’ll help them to join AggLayer and share liquidity from other chains.
Ethereum Name Service is researching expanding to L2s and even launching their L2. They’re expecting tangible results this year.
Taurus, a digital asset solutions company, is partnering with Lido Protocol to provide $ETH staking service to Swiss banks and corporate clients.
Stakewithus launched their native ETH staking product. Users can stake tranches of 32 $ETH required to be an Ethereum validator.
🧠 Twitter Alpha
- Liquidity as your north star.
- Total Crypto MCap above 2T.
- Stunning ETF Daily flow from Blackrock.
- Do not download anything from strangers.
- Airdrop clarity from Stephen the calculator guy.
😂 Meme
Until next time,
Edgy “knows it’s time to take profits when the Uber drivers start talking about Crypto“
