• Coinstack
  • Posts
  • Coinbase Unveils L2, BlueSky Launches Beta

Coinbase Unveils L2, BlueSky Launches Beta

Coinbase building own Ethereum layer-2 network powered by Optimism called Base, Towns raises $25M to build decentralized messaging, and Kratos raises $20M for web3 gaming. PureSky webinar.

Author

Ryan Allis
March 02, 2023

Token price performance of major L1s since we began writing Coinstack 26 months ago

Thanks to Our 2023 Coinstack Sponsors…

We have one open sponsorship spot available for your firm - please see our sponsor deck and schedule a call to discuss.

💵 Weekly Crypto Fundraises & Deals

Here are all the crypto fundraises we heard about this week, ranked by size…

💵 Webinar: PureSky - The World’s First Carbon Credits DAO

The carbon credits market is exploding -- and has grown from $300M to over $1B in the last year. Forecasts value the carbon credit sector at $50B by 2030, depending on how aggressively countries around the world pursue their climate change targets.

There’s just one problem. There’s no decentralized, trustworthy carbon credit verification platform. That ends today with Pure Sky, the open carbon credit registry.

Pure Sky is a Decentralized Autonomous Organization (DAO). Pure Sky is a Benefit Corp building a modern, community-driven carbon credit registry that will solve the massive problem of verifying, rating, and tracking carbon credits.

Join our webinar on Thursday, March 9, 2023 to learn more about Pure Sky, how their carbon credit verification system works, and how to invest in Pure Sky. Accredited angel investors, strategic investors, family offices, and venture investors are welcome to attend.

What You Will Learn In the Webinar

  • How the Pure Sky open carbon credit verification system works

  • How to invest in Pure Sky’s Reg CF Crowdfunding round

  • The size of the carbon credit market globally.

  • How companies are achieving net-zero in their carbon emissions through purchasing carbon credits.

  • How the Pure Sky DAO works - A DAO is a type of company structure that operates with no central governing body, but instead unites stakeholders through a common, forward-looking goal and a method of voting. In Pure Sky’s case, that common goal is a carbon credit ratings agency that’s controlled by investors and stakeholders.

  • How the Pure Sky Token works - Pure Sky DAO is controlled by holders of the Pure Sky Token. Token holders are incentivized via profit sharing that keeps member interests in focus. Each token holder will formally vote on various decisions for the organization based on various subcommittees.

  • How Pure Sky makes money from carbon credit registration fees, issuance fees, carbon credit exchange fees, and carbon credit retirement fees

🗞️ Crypto News Recap: The Top 5 Stories

Welcome back to This Week in Crypto… everything you need to know in one scannable format. Here are the top 5 stories of the week…

  1. 🚀 Coinbase Is Building Its Own Ethereum Layer-2 Network Called 'Base'- Coinbase has unveiled Base, its own Ethereum layer-2 network. The company says Base will be the new home for Coinbase’s on-chain products and—it hopes—an open ecosystem for millions of new decentralized apps.

  1. 🚩 Coinbase to Delist Binance USD Stablecoin Amid Regulatory Scrutiny- Cryptocurrency exchange Coinbase warned customers Monday the company will suspend trading for Binance USD in less than a month, two weeks after Paxos Trust disclosed it will stop minting the Binance-branded stablecoin, citing regulatory pressure.

  1. ⚔️ Binance Bites Back Against Forbes Report Claiming Transfer of $1.8 Billion in Client Collateral- Binance denied using client assets without consent after a Forbes report said the crypto exchange moved "$1.8 billion of collateral meant to back its customers' stablecoins. Forbes reported this week that on a single day, Aug. 17, 2022, $1.78 billion worth of collateral moved out of Binance wallets intended to back stablecoins, particularly b-USDC, a wrapped version of Circle’s USDC. According to Forbes’ on-chain analysis, the facts of which Binance has not disputed, $1.2 billion of this was sent to trading firm Cumberland DRW, with other amounts going to now-collapsed hedge fund Alameda Research, Tron founder Justin Sun and crypto infrastructure and services firm Amber Group. Crucially, according to Forbes, this outflow was not accompanied by a corresponding reduction in the circulating supply of b-USDC tokens.

  1. ⚖️ SEC and New York Regulators Push Back on Binance.US’s Acquisition of Voyager-The U.S. Securities and Exchange Commission (SEC), the New York Department of Financial Services (NYDFS) and the Attorney General of the State of New York have objected to Binance.US’s amended plan to acquire crypto lender Voyager.

  1. 😑 Jane Street Wallet May Have Been Linked to UST Depeg, Wintermute Researcher Says - Wintermute’s head of research tracked a loan Jane Street received to a Coinbase wallet which interacted with the UST de-pegger.

  2. 🐦 Jack Dorsey’s decentralized Twitter rival enters app store - The interface of Jack Dorsey’s decentralized Twitter alternative, Bluesky, resembles the look of Twitter and copies many Twitter features — but operates on a decentralized network that protects it from being shut down by governments.

💬 Tweet of the Week

📊 Key Stats of the Week

Here are the most important and interesting stats in crypto this week...

1. Monthly NFT Marketplace Volumes on Ethereum Crossed $1 Bill for the First Time Since May

Source: @rebeccastev

2. New Addresses on Optimism Reached 20.5k on Feb 26, After Staying <5k for Most Days After Optimism Quests Ended

Source: @rebeccastev

3. The 7DMA of Active Users on Solana Fell Below 250k for the First Time in Over 2 Years on Feb 26

Source: @rebeccastev

4. Almost Half of Coinbase’s Revenue for Q4 Came From Non-transaction Revenue; Most of the Other Source Revenue Came From Interest Income

Source: @rebeccastev

5. On-Chain Stablecoin Volumes on Ethereum Are on Pace to the Lowest Since April

Source: @rebeccastev

📝 Highlights from the Top Crypto Reports

Here are the top highlights from the best crypto research reports this week…

Intro

DAI, MakerDAO's core product, is a stablecoin minted as debt. The success of DAI as a product depends on its widespread acceptance across various markets, such as decentralized exchanges (DEXs) like Uniswap and money markets like Aave. However, Maker has little control over the downstream protocols that determine its native stablecoin’s success, making it subject to external incentives and strategies.

What if Maker was to release its own downstream market protocol? They would have complete jurisdiction over the protocol design, more effectively incentivize and control DAI’s usage, and offer new products, extending their reach throughout the DeFi ecosystem. This is precisely the motivation behind the pending launch of Maker's Spark lending protocol developed by Phoenix Labs.

Spark Protocol

Spark Lend, a lending platform forked from Aave V3, is the first product in a broader strategy to build vertically integrated markets for DAI.

Similar to other money markets, Spark Lend lets users deposit assets as collateral and borrow assets as debt from other users. However, Spark Lend’s tight association with Maker enables a few unique characteristics.

Initial Launch Parameters

The most impactful characteristic is the ability to set the borrow rate of DAI on the protocol below other money markets. Initially, the plan is to set the rate at the Dai Savings Rate (DSR) of 1%. This will be the cheapest credit rate in DeFi, made possible by Maker fronting the initial 200 million DAI debt ceiling for the vault and completely removing the need for third-party liquidity providers.

Historically, MakerDAO balanced vault stability fees and the DSR to manipulate the supply and demand for DAI to maintain its peg. With this new market extension, MakerDAO will be able to directly monitor and regulate the supply of DAI in the Spark Lend market. This enables the DAO to guarantee the variable borrowing rate trends toward a specific level and yields an additional tool to manage DAI fluctuations.

The core component that sets this new DAI-supporting lending engine apart from other platforms is the combination of Maker’s Dai Direct Deposit Module (D3M) and PSM. D3M is a unique vault that allows Maker to directly interact with any secondary market by actively controlling the DAI supply according to current demand. Users will benefit from a more fixed, and reliable DAI borrowing rate, which typically is subject to high fluctuations. The D3M has recently been incorporated into both AAVE and Compound, yielding more lucrative borrow rates for DAI across the greater lending market.

Spark Lend will only support five types of high-liquidity collateral on launch: DAI, ETH, Lido’s stETH, wBTC, and Savings DAI. Savings DAI (sDAI) is DAI locked in the DSR contract, essentially acting like a savings account by offering a stable, low-risk yield. As previously mentioned, Spark Lend also incorporates the PSM, enabling users to directly swap USDC for DAI at 1:1 within the interface.

Future Plans

Later this year, Phoenix Labs will integrate fixed-rate borrowing, cross-chain support on Ethereum L2s and sidechains, redundant oracles for resilient price monitoring, and launch their own liquid staking derivative, EtherDAI. The Spark Lend protocol is opening the doors to decentralized lending particularly for retail investors. Beyond increasing the borrowing demand for DAI with low-interest rates, Maker is taking a grand step forward by installing the AAVE-based UX to make it much easier for users to access its native stablecoin.

Lending Market Implications

One of the prime features of the pending Spark Lend platform is cheap credit or the ability to borrow DAI at the DSR variable rate of 1%. Given the current bear market conditions, borrow rates have been relatively low, yet haven’t quite met the new DSR rate. Looking at the average borrow rate across AAVE and Compound on Ethereum over the past year, the borrowing APY has averaged 1.8% with a typical standard deviation of 0.8%. Regarding DAI alone, the average borrowing rate on Compound and AAVE for the past year was approximately 1.7%, with slightly less variability at 0.6%.

🎧 Top Crypto Podcasts of The Week

Here are the crypto podcasts that are worth listening to this week...

📈 Top Performers This Week

Here are the top 15 performers in the last week from all tokens with a market cap of $20M+.

💬 Join The Coinstack Telegram Community

Join our Telegram Channel here to chat with our community, ask questions, and learn more about the future of money as we move to a decentralized internet and the creation of a new open global monetary system that works for everyone.

💬 The People We’re Following Closely on Twitter

📚 How To Get Started With Crypto Learning

📰 The Coinstack Newsletter:

Tracking the most important blockchain stories of the 2020s, including a decentralized internet and the creation of a new open global monetary system that works for everyone. As always, published for informational purposes only. Please do your own research. Just our opinions. Not intended as financial advice as we are not financial advisors. We may own some of the digital assets we write about as we believe strongly in the sector. Please do your own research. Published and written weekly by Ryan Allis and Mike Gavela.

Coinstack is a news and analysis newsletter for the digital asset industry. None of the information here is a recommendation to invest in any securities or other types of investments. Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All investments involve risk and may result in loss.

Comments and thoughts are welcome on our Telegram channel:

Please share with your friends and colleagues.