What a wild week. Degens are betting on Hamster races, Worldcoin launches, and Twitter is officially known as X. Price-wise, we’re back to choppy markets with Bitcoin feeling like a $30k stablecoin.
Here’s what we got today:
- Latest Narrative. The Bot narrative led by Telegram Bots is in full force.
- The Worldcoin Drama. The launch of a proof-of-personhood protocol based on eye scans is creating controversy.
- Around the Web. Gains Network upgrading its tokenomics, MakerDAO discussing increasing DSR, PancakeSwap expanding to zkSync, and more.
Here’s your Edge 🗡️!
“I tell my father’s story of the gambler who lost regularly. One day he hears about a race with only one horse in it, so he bets the rent money. Halfway around the track, the horse jumped over the fence and ran away.” – Howard Marks
Narratives
The Bots Narrative
A new narrative is popping off: the bot narrative. And it is fueled by the massive growth of telegram bots.
We first covered Maestro in this newsletter back on June 8th. Since then, this narrative has taken off.
Here’s everything you need to know about it.
What are they? Typically, degens will trade tokens using wallets and DEXes. But Telegram bots simplify this: They allow anyone to trade directly from Telegram.
And these bots aren’t just capable of basic buying and selling – they can also perform advanced tasks, including:
- Copy-trading? Got it!
- Handling airdrops? Yep!
- Portfolio management? On it!
- Strategies, technical indicators, and more? Yup, all covered!
And they are popping off everywhere:
- TG bots are printing money via fees.
- CoinGecko has already created a new category for them.
- Many DeFi thought leaders are threading about it.
- On July 23rd, the trading volume from Telegram bots crossed $20M.
Why the hype?
Firstly, Telegram is no small fish. It’s a gigantic platform. Allegedly, it boasts over 550 million monthly active users, of which more than 55 million are daily active users. Even just a tiny percentage means a massive amount of users.
They solve one of the greatest problems in the crypto industry: Bad UI. DeFi is often confusing for beginners. Navigating the normal wallet + DEXes route is highly complex for absolute beginners, making it challenging to participate in DeFi. Often, it would be best to jump between multiple websites, ensure security, approve all sorts of transactions, etc.
Telegram bots instantly resolve all of these problems. They consolidate (almost) all activities into a straightforward interface.
Comparatively, it is straightforward to use Telegram bots. Telegram is already widely used in the crypto sphere. And now you have to install a bot to get started. Also, bots can be used from mobile phones, which isn’t common in the standard setup.
These bots make a ton of money. Subscription fees are the primary source of revenue. Some devs choose a one-off fee over an ongoing subscription.
Alright. Is there a list of these Telegram Bots somewhere? Glad you asked! Here’s a comprehensive list of crypto-related Telegram bots you might want to check out:
- Maestro is a TG bot without a token. And it’s making a ton of money. In May, they had a revenue of around $5.86M. $3.03M in June. And $3.53M in July. If they launch a token, it’s likely to be a massive hit.
- $UNIBOT from Unibot is the leading token in this narrative. They share revenue with token holders. In July, they managed to rake in over $557.64k in revenue.
These two are the leading contenders. There are some other ones, but the market caps are too low for me to feel comfortable shilling to you.
One tip: I prefer buying the category winner than trying to find the “next” hit. It’s more solid, in my experience. They benefit from being more Lindy and have more mindshare than a coin competing against 30 different copycats simultaneously.
Some of the returns from this narrative have already been realized. That doesn’t mean this is going to die. Discord bots haven’t taken off yet, like Telegram bots. So, they might be part two of this narrative.
Also, this narrative is backed by the number of users they’ve captured and the fees they print. So, whenever a new narrative comes along to cause a renewed trading frenzy, they’ll also be able to capture some of that value.
But don’t ape into Telegram bots blindly.
You’re giving these bots private keys or API keys to exchanges to execute transactions on your behalf. You are giving them access to your funds.
Since the narrative is so popular, we’ll surely see more scams and rugs. Do NOT use bots with your main wallet; instead, use new ones. And don’t hold your long-term investments there, given the risk.
Stay safe.
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Projects
The Worldcoin Drama
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Last week, Worldcoin went live.
And that has been creating a lot of buzz. They have had over two million WorldID sign-ups. Its Market Cap now sits at around $250M. And their Fully Diluted Valuation has crossed the $22B mark.
However, Worldcoin is also a hot topic on crypto Twitter. Many have concerns. Here’s everything you need to know about Worldcoin protocol:
What is it?
It’s a scalable solution for distinguishing humans from AI online. It has four parts:
- Orb: A device that’ll scan your eyes.
- $WLD: The token for the Worldcoin protocol.
- World App: The first wallet for the Worldcoin protocol.
- World ID: A digital identity card proving that you are human.
How does it work?
Like all other chains, it is a platform that enables users to interact with dApps. But with a special feature: Users can prove that they are a real and unique human person.
By signing up to scan your eyes, you’ll get WorldID and $WLD tokens in return. And since everyone’s eyes are unique, your scans will prove you are real and unique.
With WorldID, you can prove that you are human across the internet. It is a proof-of-personhood.
Note: you’ll still be able to interact with the chain without WorldID. But you’ll probably miss out on a lot of the associated benefits. Also, the whole point of Worldcoin is the WorldID.
But do we need it?
When somebody hears about it for the first time, they’ll likely have a negative reaction. Eye-scanning devices and a global human database sound like a recipe for a Sci-Fi dystopia.
But proof of personhood is necessary.
The world is becoming ever-more digital. And the internet is the town square of our global village. The only problem: Our town square is filled with bots. We need a way to distinguish between bots and real human beings.
Here are just a few concrete examples to demonstrate why:
- Democratic voting requires that everyone can prove that they are a unique person.
- Readers need to know the difference between cheap AI-generated content versus thoughtful pieces written by real humans.
- Blockchains and dApps must recognize unique humans and bots to prevent airdrop farming. Then, they’ll be able to allocate tokens exclusively to individual humans rather than wallets that could belong to bots.
It is an internet-native identity card. We need it because the alternative is identity cards issued by different nation-states.
So, it is clear that we need proof of personhood as a solution.
But then, why is everyone angry at Worldcoin?
Many people have raised severe criticisms against Worldcoin.
#1 We should look for solutions that don’t involve biometric data. There are other such experiments, such as Proof of Humanity. However, none of them have scaled yet.
#2 There shouldn’t be a global database holding biometric eye scans of all humans. It’s dystopian, like villains using CCTV and webcams to identify heroes and send kill teams.
Worldcoin does address this criticism. After users have created their WorldID, they can elect to delete their data. Worldcoin will hold a set of numbers proving they are real and unique human beings. But the number will not be connected to the actual human.
#3 We need a public good, not a private company. Worldcoin is being built by a private company led by Sam Altman. His other company, OpenAI, started as a non-profit and shifted to a for-profit company as soon as they saw money. So, people are not convinced that Worldcoin will remain a public good.
#4 Malicious Orb operators. After all, They can decide not to delete the biometric data and sell it. Or, people could buy eye scans of poor people cheaply and keep the associated WorldID and its benefits (including WRD rewards) to themselves.
#5 The WLD token allocation. Around 23% of WLD tokens are allocated to the team and investors. That’s too much control over the identity system of humanity.
Wrapping up
I still haven’t made up my mind about Worldcoin.
On the one hand, we need a scalable digital identity system. And we need it immediately. AI-generated content and AI-powered bots will wreck our information and financial systems if we don’t do something about them.
On the other hand, some of the criticisms leveled against Worldcoin are valid. Malicious operators can quite easily exploit vulnerable people. And I’m not fully sold on the privacy assurances made by Worldcoin.
I would have felt more comfortable if this project had been led by a more legitimate team that was fully committed to the good of everyone.
For now, I’m passing on scanning my eyeballs. It wouldn’t be able to handle my Sharingan anyway.
🚀 DeFi Catalysts
Optimism will unlock 24.16 million OP tokens in the coming Sunday. This is equal to $36.96 million in US dollars.
Gains Network has unveiled its plans to upgrade its tokenomics. The average existing $GNS staker will earn 60% more at the same revenue.
TraderJoe is expanding to the Ethereum mainnet. The Avalanche native decentralized exchange will have to attract Ethereum mainnet liquidity.
MakerDAO is considering the Enhanced DSR. Increasing the Dai Savings Rate available to DSR users is a temporary tactic. This should increase the DAI demand.
ThenaFi announced early access to ALPHA. It is a next-gen trading platform powered by the SYMMIO RFQ engine. They’ll also be conducting a trading competition this quarter.
Avalanche Foundation will purchase around $50 million of RWA tokens minted on the Avalanche network. This is to attract more RWA activity on the network.
Mantis Swap is rebranding itself. MNT, the old token, will be replaced by MNTS. In the coming days, they’ll also release their roadmap, new tokenomics, incentive program, etc.
Hop Protocol is discussing the expansion into the Base mainnet. The vibrant Base ecosystem has the potential to provide a lot of volume to the Hop Protocol.
PankcakeSwap will launch on zkSync today. This is a big new market for PankcakeSwap. Which means more users and revenue.
Pendle received the grant to build and launch their protocol on the Mantle Network. This is a win-win relationship for both projects.
Gearbox introduces Gearbots. A trustless way to create bots for trading coins (without sending your private keys).
📰 Industry News
Utopia Labs announced USDC bank transfers for businesses. Now, businesses in any country (except a few like North Korea) can send USDC to any US bank account.
ChainLink cofounder Sergey Nazarov says that traditional financial institutions will use their CCIP infrastructure to connect their (future) chains with other blockchains.
Polygon released the three pillars for its governance structure for its upcoming Polygon 2.0 Era. They are Protocol Governance, System Smart Contract Governance, and Community Treasury.
Public Goods Network went live on mainnet. They aim to generate sustainable funding for public goods. By simply using the network, you’ll contribute to creating public goods.
Nasdaq said they are stopping the launch of its own cryptocurrency custody service. Regulatory risks in the United States were cited as the reason for suspending the launch.
OpenSea introduced Deals. It will facilitate exchanges of NFTs between two users. Everything from the offer to the deal will happen on OpenSea.
EraLend was hacked for around $3.4 million. It was the largest lending protocol on zkSync. The hack was a read-only reentrancy attack.
Coinbase is shutting down its lending program. It gave users fiat loans up to 1 million dollars against as much as 30% of their bitcoin (BTC) holdings.
Optimism introduced the Law of the Chains. It is creating guiding principles for Optimism Governance and the Superchain.
Gary Gensler, the chair of SEC, asked senators for an additional $109 million for his agency’s enforcement budget. He’s also asking for $393 million from Congress for technological costs.
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