GMonday readers!

The end of the previous week was extremely eventful—let’s do some summarizing. In an SEC lawsuit against Ripple Labs, a U.S. federal judge has partially sided with the blockchain developer responsible for creating XRP. The court's ruling established that Ripple's institutional sales of XRP were deemed to be an unregistered securities offering.

However, it was also determined that programmatic sales did not fall under the same classification, which the market interpreted as a huge victory for the industry. It’s worth mentioning that many people believe that the case isn’t over and that the SEC will likely appeal the ruling. The XRP price jumped ~75% following the news, and almost $20B was added to the market capitalization. XRP is currently trading at ~$0.74, down ~10% from the local top on Friday.

On Friday, Synthetix announced Infinex, a derivatives front-end to Synthetix’s onchain trading infrastructure. The new exchange aims to take on centralized exchanges, only requiring a username and password to access while remaining non-custodial. Infinex will be governed by Synthetix’s native token, SNX, and the platform’s revenue will be used to accumulate the token. After the announcement, the price of SNX reached a top of ~$3 on Friday, a ~40% increase from the beginning of the day. At the moment, SNX is trading at ~$2.6.

Celsius has made a comeback to the spotlight. The FTC reached an agreement with Celsius that would return ~$4.7B to customers and restrict the company from restarting its operations. This follows the CFTC, FTC, and SEC filing lawsuits against the bankrupt lender and the former CEO Alex Mashinsky. Additionally, Mashinsky has been charged with seven counts by the DOJ, including securities and wire fraud. The former CEO was arrested on Thursday but has since been released on a $40M bond.

Looking into the future, Coinbase will release its second-quarter earnings report early next month. According to analyst predictions, there is an anticipated decrease of over 7% in S&P 500 earnings compared to the corresponding period last year. Coinbase reported a ~$79M net loss in Q1 2023, which was somewhat positive news compared to the net loss of ~$430M in Q1 2022.

There has been a lot of speculation around the upcoming earnings release, and most investors seem to think the results won’t be good. Therefore, if earnings come in hot instead, the share price could perform exceptionally well in the coming months, already having grown by more than 200% this year.

That’s all I’ve got for you this Monday. Have a great week!

– Brick

Please note that in the above graph, the scalar revenue generated at the end of H1 2023 should, in reality, be displayed as positive.

Optimism’s weekly transaction fee profit—the difference in transaction fees paid by users and the estimated cost of posting calldata to Ethereum Mainnet—has grown notably in the past few weeks, reaching an all-time high of ~253 ETH in the last week of June. Optimism also applies a scalar multiple on the gas paid to Ethereum, with these funds being channeled to public goods funding. From the beginning of ~Q2 2022 to the end of ~Q2 2023, the multiple was set to 1, which is the reason for no scalar revenue having been generated during this period. Since its launch, Optimism has amassed ~5.3K ETH in cumulative profit.

In early June, Optimism executed its Bedrock upgrade, which set the stage for Base, Coinbase’s rollup solution built on Optimism's software stack known as the OP Stack. Base recently launched its mainnet for developers, and a public rollout for the L2 is planned to take place in early August. There are no plans to issue a native token for Base, but the rollup will reportedly share 10% of sequencer revenue with the Optimism Collective, another tailwind for Optimism’s overall revenue.

Lens, the decentralized social media primitive built by Aave core contributors, announced its V2 plans today in Paris at EthCC. It introduces ‘Open Actions,’ which enables users to interact with external smart contracts via Lens publications. This opens the door for Lens users to mint NFTs, swap ERC-20s, participate in DAOs, and more directly on Lens user interfaces. This should, in theory, create a powerful way for content creators to monetize their work while creating value for social media users.

NFTs are composable with ERC-6551 under Lens V2, meaning that a specific NFT can have a profile that creates its own value chain and social relationships. This creates a new, interesting use case for NFT groups that want to build strong communities via decentralized social media. Some of the features that V2 brings to market include improved user security, the ability to transfer handles without transferring their entire profiles, and more. For those interested in diving deeper into Lens, we recommend checking out the team’s official post on Mirror. Many folks are speculating that there will be a native token for Lens, so minting a profile and using various interfaces isn’t a bad idea (NFA).

Arbitrum Stylus: The Dual VM

Arbitrum Stylus will allow developers to code smart contracts in Rust, C, and C++, alongside EVM languages facilitating cheaper dapp interactions and attracting a more extensive developer base. Additional languages will be supported in the future.

Reserve Protocol: Decentralizing the Creation of Money

The Reserve protocol is a permissionless platform where users can deploy, mint, or redeem synthetic assets (RTokens) that inherit the properties of the underlying collateral backing, with the added benefit of over collateralization that RSR Stakers can opt into.

Bitcoin Lightning Network is now supported by Binance

Adoption of Bitcoin’s leading scaling solution, Lightning Network, has steadily grown since 2020, with Binance now on board

Crypto prices flat as markets hold breath for Coinbase earnings

Crypto may be less correlated with major stock indexes these days, but that won’t stop markets bracing for earnings impact

The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.

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