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Peer: The Metaverse for Augmented Reality

Peer is building a metaverse for augmented reality, plus top weekly news about FTX, Uniswap, FDIC, Holdnaut, the ETH Merge, and Tornado Cash, plus the top stats and reports of the week.

Author

Ryan Allis
August 24, 2022

Social Links: Twitter | Telegram | Podcast | Newsletter | NFTs | Fund

Issue Summary: Welcome back to Coinstack, your favorite weekly newsletter for institutional crypto investors, where we review the top news and reports in the digital asset ecosystem. This week we write about Peer building a metaverse for augmented reality and share top weekly news about FTX, Uniswap, FDIC, Holdnaut, the ETH Merge, and Tornado Cash.

In This Week’s Issue:

  1. 🗞️ Top Weekly Crypto News - FTX Grows Revenues 1000%, Uniswap Bans Wallets Linked to Sanctions & Hacking, FDIC Sends 5 Cease and Desist Orders

  2. ✨ Featured Article: Peer - The Metaverse for Augmented Reality: A Digital Layer on Top of the World By Mike Gavela & Ryan Allis

  3. 📺 Institutional Webinar - The Ethereum Merge: What You Need to Know - Thur, Sept 8

  4. 💵 Weekly Fundraises - Ready Player Me ($56M), Fractional ($20M), .bit ($13M)

  5. 📊 Key Stats - Addresses Holding 32+ ETH Hit 18-Month High, ETH Yields Post Merge Targets 6-12%, Magic Eden Holds 90% Market Share For NFT Marketplace

  6. 💊 Vitamin3 of the Week: Tornado Cash - Money Laundering vs. Privacy

  7. 📝 Report Highlights - Lido and the Race for L2 Liquidity

  8. 🎧 Best Crypto Podcasts - Coinstack, Bankless, Real Vision

With prices down around 50% over the last 12 months across many digital assets, it may be a good buy in opportunity for digital assets ahead

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Peer is an augmented reality and web3 technology company developing a gamified digital layer on top of the world -- a metaverse for the real world. Peer is headquartered in Seattle, Washington. To learn more, visit www.peer.inc and follow @peerpmc. See our article about Peer below.

Amphibian Capital is a crypto quant fund of funds investing in the world’s leading crypto hedge funds. They have researched and vetted over 250+ funds and selected the best based on their proprietary scoring system. Learn more and see the deck at www.amphibiancapital.com.

🗞️ Crypto News Recap: The Top 10 Stories

Welcome back to This Week in Crypto… everything you need to know in one scannable format. Here are the top 10 stories of the week…

  1. 😮 FTX Grew Revenue 1,000% During the Crypto Craze, Leaked Financials Show - The exchange took revenue from $90 million in 2020 to more than $1 billion last year as cryptocurrencies hit an all-time high. Q1 2022 revenue was $270M and the valuation from the January 2022 raise was $32B.

  2. ⚖️ FDIC Sends 5 Companies Cease and Desist Letters for Making Statements About Deposit Insurance - The Federal Deposit Insurance Corp. (FDIC) issued Cease and Desist Letters demanding Cryptonews.com, Cryptoytosec.info, SmartAsset.com, FTX.US and FDIC Crypto.com stop making misleading statements about FDIC deposit insurance and implement corrective measures.

  3. 🌙 Do Kwon Reportedly Hires Lawyers in S. Korea To Prepare for Terra Investigation - Terraform Labs co-founder Do Kwon has reportedly hired a lawyer from a domestic law firm in South Korea just days after claiming the South Korean authorities are yet to reach out to him or file any charges against him.

  4. 😔 Crypto Lender Hodlnaut Announces Police Inquiry, 80% Staff Cut - Hodlnaut, a Singapore-based crypto lender, updated the community on its judicial management filing and is fielding pending proceedings with the Singapore Attorney-General and the Singapore police force.

  5. 🇳🇱 Dutch Authority Says Arrested Tornado Cash Developer Suspected of Involvement in Financial Crimes - The Fiscal Information and Investigation Service (FIOD) has confirmed that the arrested Tornado Cash developer was suspected of being involved in the hiding of criminal financial transactions and facilitating money laundering.

  6. 😟 Wallets Banned by Uniswap Labs Due to Sanctions - Uniswap banned 253 wallet addresses from its front end as part of its efforts to abide by US sanctions and prevent known hackers and scammers from using the exchange.

  7. 🇰🇷 South Korea To Block 16 Unregistered Foreign Crypto Exchanges - South Korea’s Financial Services Commission (FSC) reported 16 foreign crypto exchanges to investigative agencies for violating the Specific Financial Information Act, news1 reported on August 18.

  8. 🇨🇦 Vitalik Cheers Ethereum Community Push Back Over Harsh Canadian Crypto Rules - Ethereum co-founder Vitalik Buterin commended community members for speaking out against new Canadian rules limiting crypto buys.

  9. 🇺🇦 Ukraine Spent $54M of Donated Crypto Funds on War Effort - In the spirit of transparency, Ukraine’s Ministry for Digital Transformation has published a financial report detailing how it spent the $54.6 million worth of funds raised from the crypto community’

  10. 🇦🇺 Australia Unveils Plans for Crypto Regulations Unlike ‘Anywhere Else in the World’ - Australia’s crypto regulators are attempting to go where no government has ever gone before. Share Coinstack

Peer - The Metaverse for Augmented Reality

By Mike Gavela & Ryan Allis, Publishers of Coinstack

About Peer: Peer is an augmented reality and web3 technology company developing a gamified digital layer on top of the world -- a metaverse for the real world. Peer is headquartered in Seattle, Washington. To learn more, visit www.peer.inc and follow @peerpmc.

Imagine for a moment an entirely new type of social network. On this new social network, the point isn’t to get stuck in an endlessly scrolling feed in your bedroom.

Instead, the whole point is to actually go outside with your phone, smartwatch, or Augmented Reality (AR) glasses and interact in the real world -- with digital content that was posted into a specific place in the real world by friends, creators, and businesses.

If you can’t go outside, you can always use AR at home using Peer’s patent-pending holodeck AR experience.

Think Facebook + Pokemon Go. Think “the augmented reality social network” creating a digital layer on top of the world.

Preview screenshots of the Peer Social App

A Use Case: Hungry in NYC?

To grok this, imagine for a moment that you work in New York City at 51st and 5th, and it’s lunchtime. You’re hungry for some Vietnamese food. You use your voice to ask the Peer app on your smartphone to lead you to the nearest Vietnamese restaurant that is both recommended by a friend and has a current lunch special available.

Suddenly an overlay pops up showing you which way to walk -- your screen is half map and half real world overlay. You’re guided to JoJu, a Vietnamese eatery on 46th and 5th, just a few blocks away.

When you arrive at JoJu you hold your phone over the entrance and up pops both a 10% coupon that it posted on Peer and a thumbs up from your friend Anne Saunders who went there two weeks ago and enjoyed the Banh Mi sandwich.

On a long road trip, you could also go to a specific highway stop and see the digital “DinoTours” as a free 3D experience, placed there by a creator wanting to draw attention to their town.

An example of a creator’s digital installation “DinoTours” within a specific location that you can go to in real life and see using the Peer App

This is the type of use case for which Peer is building its social app - connecting you to the real world instead of addicting you to an endless news feed. Peer plans to launch its app later this Fall.

“Augmented reality is the usable and actionable layer of the metaverse. It’ll extend experiences beyond the confines of the device. We’re only focusing on AR because VR doesn’t have the fidelity and reachability to be in the metaverse equation at this point. The first step to the metaverse is combining the physical and digital world. That’s AR plus blockchain, pure and simple.”

- Tony Tran, CEO of Peer

Augmented Reality Comes to the Blockchain via Peer

Peer is launching a new type of web3 social application this Fall that will be very different from Facebook, Twitter, and TikTok.

The app, which also goes by the same name, opens to an AR stage similar to Pokémon GO. Under the hood, it is driven by Peer’s patented fluid-timeline engine that allows users to create and browse content based on location, time, and whether they are friends with the person or they're not following the person.

You’ll be able to seamlessly transition from map mode to AR mode as you walk around.

All this content will live on the Peer blockchain and be tagged to a place, a time, and a person. Your data will be your data.

There is a coin called the Peer Metaverse Coin (PMC) that will incentivize you to use the app, refer your friends, and post great content. You’ll be a partial owner of the network, instead of the network owning you.

While massive firms like Facebook/Meta are now investing billions in building closed virtual worlds they are missing the bigger opportunity in Augmented Reality that integrates digital content on top of the real world as you move around it.

The Peer app will use its high-speed blockchain to allow users to have an encrypted version of their own data to maintain control of their information .

You’ll be incentivized to post content to physical locations mapped and geolocated in the real world so that people can go out into the real world and find and interact with that content.

It’s the metaspace (digital world) and the meetspace (physical world) combined -- with a fun gamified element where people are actually moving around.

Using the Peer app on a smartphone, tablet, smartwatch, or AR glasses, users will soon be able to see content from creators, friends, and businesses overlaid on the real world

Teleporting to Other Places & Times

What’s cool about Peer is that the app allows you to go to a location in real life -- or “teleport” in the app to anywhere in the world instantly.

Let’s say you live in Omaha, Nebraska and want to see events happening in Central Park in advance of a trip you are planning to New York next week.

You could teleport there digitally and see all the content, events, and specials in that area within a distance radius, helping you plan your trip.

You could teleport to Wimbledon, the Superbowl, or a major news event and see what is happening in this moment, what occurred in the past, or what is scheduled to happen in the future.

Using your phone, watch, or AR glasses, you will see content overlaid on top of the real world -- regardless of whether you are there or not.

You could go to New York City a month ago and see posts. Or you could go to Paris and see what happened there yesterday.

If you teleport to Paris yesterday, for example, you would see posts ordered by:

  • whether they're created by a friend or a follower

  • how many real followers the creator has (their authority)

  • how far away it is in proximity to the user’s actual or teleported location

  • how many interactions and comments the post had

You could also see a multitude of different timelines together. You could see information from four different cities. There's a friends concept like Facebook and there's a follower concept like Twitter or LinkedIn.

The Magic Leap 2 Augmented Reality Glasses, launching September 30, 2022. Apple is also rumored to be launching AR glasses in January 2023 - just 5 months away.

The Purpose of the Peer Social App

The purpose of Peer is to get you out into the real world, interacting with people and experiences, not to addict you to an endless news feed that gets you watching videos for hours but not actually going out and interacting in the world.

What’s beautiful about what Peer is doing, is they're not trying to get you stuck into another virtual dimension. They're working to create an augmented reality on top of the existing reality to get people out into the world.

Here they're using blockchains and augmented reality devices to get people into the world to benefit from social content overlaid on the real world, not falling into an endless, bottomless pit of mindless content.

Some screenshots from the Peer Social App

Here’s what Peer CEO Tony Tran says about their efforts to reimagine social media.

“We are building a metaverse for the real world and helping to power the next evolution of the internet. Peer makes the world come alive, makes digital more useful, and makes you more connected. It connects the atoms and the bits, bridging the physical world with the digital information that can help you know more about it or help you interact with it. This is a future of augmented experiences where the real world is overlaid with digital creations, entertainment, and information. The experience of “reality layers” is like a choose-your-own-adventure book. They’ll help you filter the world around you, and act as a catalyst for spending time with others, strengthening in-person interactions, building communities, and deepening social relationships.”

An example of a creator’s digital installation “Whale Flight’ posted to an urban park, viewable with the Peer App

Ending Doomscrolling on Facebook, Insta, or TikTok

TikTok is a blackhole of mindless scrolling, which can lead users to develop serious dependent and addictive relationships with app usage. TikTok is the fastest growing and one of the most used social media applications today, sporting over 1.5 billion active users.

On average, users of the TikTok platform spend about 1.5 hours per day on the application. To put that into perspective, that number is triple the amount of time spent on Snapchat and Twitter (26 and 25 minutes, respectively) and twice as much as on Instagram and Facebook (38 and 41 minutes, respectively).

Source: Sensor Tower

A recent study analyzed data from 354 college students, which included 173 TikTok users and 313 Facebook users. The study found that heavy TikTok users tended to score higher on measures of loneliness.

“Scrolling the news feed is a dopamine conveyor belt, and TikTok is the newest evolution of it. It’s an even greater addictive market for drama and sensationalism than Facebook ever was, and it won’t be long before it devolves. Their algorithms are extremely addictive. Video hooks people into a cognitive loop faster than other content. What’s truly scary is that short-form videos are overriding the biological functions that normally snap people out of cognitive sinks. You’ll see endlessly similar videos, and that familiarity is what keeps people addicted.”

- Tony Tran, CEO of Peer

What Peer Is Doing Differently?

Tony Tran, CEO of Peer, describes the current phenomenon in Web2 Social Media as living with “Blinders.”

"Social media users are being unwittingly put into these dangerous, dopamine-driven addictive loops. One of the things that we discovered as we were building this web3 metaverse concept is that everyone essentially sees only a slice of the actual information. And so part of our thinking was, how can we find a mnemonic that can explain to people what is going on when they go and use these social networks? When you use social media, what happens to you? The concept of blinders came to mind. Why do we put blinders on horses? We want them to see only what we choose. So when you scroll the feed or any kind of experience on your phone, it is like you have blinders on; you can only see what is being shown to you. As a result, you get addicted to the information that your mind is looking for. We do it differently at Peer."

Peer aims to rearchitect the timeline and feed algorithm. They call it the Fluid Timeline and recently issued a patent for this new technique.

Peer believes the news feed should be brand new every day and that people should have better ways to recognize where the news is coming from and when the news was published.

“We have to change the attention economy model, where it shouldn't be about constant mindless creation; it should be about data ownership. And it should be about creating experiences and not just mindlessly consuming information, and to do that, we have to create a structure where there's money in the game. That's where blockchain becomes very important. Because once you start having people and content together on a blockchain, there can be unique incentive structures that promote authenticity and creativity vs. virality at whatever cost.”

-Tony Tran, CEO of Peer

With Peer’s Fluid Timeline, users can access a 2-dimensional newsfeed based on time and location. By doing this, Peer severely diminishes the blast radius of fake news on someone’s feed. Content normally takes a grassroots approach to spread. A singular breaking headline would be contextually the same regardless of whether it was posted in NYC, Shanghai, or Dubai or if it was posted today, yesterday, or tomorrow.

With Peer’s Fluid Timeline, users can access content and see live feeds in multiple locations at multiple times -- where a content’s location is highly relevant.

“It comes down to design. If you squeeze everybody into a singular feed with no time structure and location structure associated with it, what you end up with is a very easy way for content to magnify out of control. So we want to create a method where you can let any kind of content proliferate but not overly magnify. That's the trick of it all. So how do you arrive at that? First, you must redesign the feed, so there is a sense of time and structure instead of just regurgitating. We realized that we combined a calendar and a map with the content. We essentially have a new design of an experience where you can do everything you normally were doing, but now there's a sense of understanding time and location. So structural re-design of the feed is the first step.“The second step is to give users the ability to own all of their content and control what parts of the experience on this new design get seen. With web3 and blockchain, everybody owns their data, so the next social experience is going to be just a container where you bring your stuff to the table, and then when you leave, you can decide to leave it there at the table, or you can take it all with you and have granular control. One of the things that we're developing is we're giving you the ability to basically store your data in this experience, in something like the Interplanetary File System (IPFS) where you have full control of your information.”

- Tony Tran, CEO Peer

An example of a game in Augmented Reality

Fighting Fake News in the Newsfeed Without Censorship

Peer is on a mission to do three things: break users away from addictive relationships with social media apps, get people to start interacting with the real world beyond their device screens, and eliminate fake news from our social media feeds.

Peer plans on fighting fake news by launching a news feed that allows users to see content based on location and time while using the blockchain to allow users to have an encrypted version of their own data.

Peer is seeking to encourage its users to post content to physical locations mapped and geo-located in the real world so that people can go out into the real world and find and interact with it.

Authors can also boost their posts by staking certain amounts of PMC. So I could commit 100 PMC, and if the information in the post is not true, I would get slashed, and I would lose that PMC.

“We think every day you should see a brand new feed. We want to give people better ways to recognize where and when the news is coming from. On Facebook, it is very easy for you to post content and create some sort of emotional response. The emotional response is what enables fake news to circulate, trend and go viral – that’s the way the algorithm works. Content can stay up at the top of people's feed and constantly get circulated and magnified across time. In contrast, with Peer, we are giving everybody the ability to see content based on location or time. On the Facebook feed, you have very little control over what you see. So if it were real news and news that matters people would share it across different zones, demographics, and time spheres. We're basically preventing news from spreading as quickly as it does on a normal feed because we've sectioned off into various feeds depending on the time or location the user has chosen.”

- Tony Tran, CEO of Peer

The Magic Leap 2 is launching September 30, making high quality AR headsets more accessible to consumers over time. Peer plans to work on smartphones, tablets, smartwatches, and AR headsets.

Why Is This On a Blockchain Vs. a Centralized Database?

So, why not build Peer on a centralized database? Why use a decentralized database instead for all this information storage and retrieval? Here is what Peer CEO Tony Tran had to say about that.

“To develop a social network. The way we design the feed, we want you to be able to fetch things and get certain pieces of your data that matter to you and encrypt those sections of it. So we put everything on a decentralized database. Each time we pull content out of the database, it has to be re-encrypted and decrypted. So the best way that we would be able to do this is with the Interplanetary File System (IPFS). If everybody is connected to this distributed layer set, then we can hold some content in a temporary store and some in a store that you wholly control. Another reason why we have to use a decentralized database is, for example, when you decide to go completely offline. With a centralized database, this deletes your account fully. With a centralized database, there isn't a good way for you to wipe all kinds of data that exists without the tree structure that decentralized databases can give you. Using IPFS we can tie a Federated Identity Manager to your content. When you remove your private key, there is no way for that data to be accessed at all. And so you can become completely invisible, or you can just delete all of your content very quickly. You are in complete control of your data.”

Eventually, Peer plans to make an AR-Driven Operating System for Humanity, in part inspired by the 2013 science-fiction movie Her.

Conclusion

Social Media apps like Facebook and TikTok are using addictive feedback loops that keep users glued to their screens. Real-world addictions are being created by these applications, and studies show that people are feeling more and more isolated as a result.

Peer is building a new social media application built on web3 to break people away from their screens so they can interact with the real world. Instead of being stuck on a feed, Peer’s social media app is built to interact with the real world and foster more organic relationships with one another by leveraging the power of AR and blockchain technology.

It's not about endlessly scrolling through your mobile phone feed. It's about getting out into the real world and actively engaging with people or businesses by experiencing digital content layered over the existing physical world.

About Peer: Peer is an augmented reality and web3 technology company developing a gamified digital layer on top of the world -- a metaverse for the real world. Peer is headquartered in Seattle, Washington. To learn more, visit www.peer.inc and follow @peerpmc.

Webinar: The Ethereum Merge

The Ethereum Merge is happening on September 15, 2022 moving from Proof-of-Work to Proof-of-Stake. Join us for this webinar for accredited investors and institutional allocators on what you need to know about this major upgrade for the Ethereum network. You can learn more and register here.

‍Thursday, September 8, 202212pm PT / 3pm ET / 7pm GMT55 minutes on Zoom / register here Presented by Ryan Allis, Publisher of Coinstack and GP at Amphibian Capital

What You Will Learn

  • Why Ethereum is moving to Proof-of-Stake

  • How the Ethereum community prepared for the two year process of preparing for the switch

  • How Proof-of-Stake reduces electricity usage by 99.95% versus Proof-of-Work, while increasing security (the amount of capital needed to attack) of the underlying blockchain

  • How the new Proof-of-Stake model reduces daily issuance of ETH by 90% by removing the need to pay miners, instead paying yield to stakers

  • How ETH will have a lower annual inflation rate than BTC after the merge (~0.1% vs. 1.72%)

  • What we expect to happen to the price of ETH after $18M of daily miner sell pressure is removed from the market

  • The expected yields from staking ETH post-merge (6-10% per year)

  • Our thoughts on whether Ethereum (ETH) will become worth more than Bitcoin (BTC) and achieve the Flippening in the 2024/2025 cycle

  • How Ethereum has maintained a 57% market share in DeFi and an 81% market share in NFTs

  • How the Ethereum blockchain is achieving 9x the monthly revenues of the Bitcoin blockchain

  • Why the threat of a Proof of Work fork isn’t concerning (it’s the apps and stablecoins that matter)

  • How Layer 2 blockchains like Arbitrum and Optimism reduce usage fees dramatically while still using Ethereum mainnet security

  • Up-and-coming smart contract platforms that may challenge Ethereum’s dominance over time including Avalanche, Solana, Near, Fantom, Polkadot, Sui, and Aptos.

  • How our ETH-denominated fund works to generate ETH-on-ETH returns

  • The process we went through to create an Ethereum-denominated fund designed to grow ETH holdings over time

  • How accredited investors can invest in the Amphibian Capital crypto fund of funds.

Requirements

  • For institutional investors and accredited investors

  • For portfolio managers inside hedge funds or family offices

  • For financial advisors advising HNWIs Register Here Free

💬 Tweet of the Week

Source: @financeguy74

💵 Weekly Crypto Fundraises & Deals

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

📊 Key Stats of the Week

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

1. Ethereum Number of Addresses Holding 32+ ETH Just Hit an 18-Month High

Source: @CryptoGucci

2. The Merge Is Set To Bring 6% to 12% Yields to Staking ETH

Source: @dunleavy89

3. Magic Eden Runs the Largest Solana NFT Marketplace With a +90% Market Share and $2 Billion Traded

Source: @TheBlockRes

4. Lido Finance’s $stETH Already Looms as a Core DeFi Component Across the Ethereum Mainnet, Accounting for Two of the Largest Yield Strategies on Mainnet

5. GMX Is Priced Relatively Conservative Given Key Metrics

Source: @kunalgoel

6. Crabada, Continues Its Momentum on Avalanche, Ranking as a Top NFT Collectible by Volume Sales 7D

Source: @AVAXDaily

7. HUSD Loses Peg As Stablecoin Hits Liquidity Issues

Source: Kaiko

8. Over $4.2B Has Been Stolen From Various Protocols Across 105 On-Chain Exploits

Source: TokenTerminal

9. Yield Aggregators and Lending Protocols Are the Most Common Targets for Exploits

Source: TokenTerminal

10. Over $2.5B Has Historically Been Exploited From Smart Contract Loopholes

Source: TokenTerminal

Vitamin of the Week: Tornado Cash - Money Laundering vs. Privacy

About this Section: Our friends at Vitamin3 have launched a free daily SMS covering web3 topics. You can subscribe free by sending HELLO to 305-614-9440. Here’s an excerpt from their SMS earlier this week on Tornado Cash.

(1/5) We've discussed 2 sides of the Tornado Cash (TC) story: (A) TC is a money laundering tool, allowing users to hide dirty money; (B) TC is a privacy tool, allowing users to transact safely. How can we reconcile these views?

Both clearly have some merit. Privacy in financial transactions is important. It's not safe to have neighbors know your salary, how & where you spend all your money, etc.

(2/5) Users shouldn't have to forfeit privacy & safety to use crypto.

But, it's also no surprise TC was targeted. "In US law, money laundering is the practice of engaging in financial transactions to conceal the identity, source, or destination of illegally gained money." Keyword there is "illegally," but at least 35% of funds locked in TC last week fits this description. The govt can't ignore

(3/5) that, and neither should the crypto community. Products supporting large scale illegal behavior play into the "crypto is for crime" narrative and hinder mainstream adoption. The question: can platforms like TC promote privacy & safety while preventing crime?

What's troubling is TC was shut down without warning or a path to eliminate illegal activity on its platform. TC started trying safety

(4/5) controls back in April, but it was early days. The govt could have sanctioned wallets of known hackers and worked with TC to prevent crime. Banks have had countless insider trading cases against employees; those banks still exist.

Perhaps, most troubling is the TC developer arrest. As discussed yesterday, open source code has historically been considered free speech. Breaking that precedent

(5/5) could have a chilling effect on software innovation. Plus, crypto protocols are autonomous & permanent once they're deployed on a blockchain. If a product has unexpected consequences (or illegal behavior), there's not much a developer can do after the fact.

This leads to a tough but important question: How much responsibility (if any) does a product's creator have for how a product is used?

📝 Highlights from the Top Crypto Reports

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

About the Author: Messari brings transparency to the crypto economy. Messari wants to help investors, regulators, and the public make sense of this revolutionary new asset class and is building data tools to drive informed decision-making and investment. This is an excerpt from the full article, which you can find here.

Introduction: Lido, the Merge, and Layer-2

With The Merge scheduled to occur on September 15, 2022, the fundamentals of decentralized finance (DeFi) will inherit a robust yield-bearing primitive in liquid-staked ETH. With Ethereum’s transition to Proof-of-Stake (PoS), liquid staking protocols allow users to stake their ETH in return for liquid staking derivative (LSD) tokens. LSD tokens earn staking rewards while enabling participation in DeFi protocols. To date, Lido represents the largest LSD provider and currently holds one of the most significant total value locked (TVL) metrics of any protocol on Ethereum, with over 4.1 million staked ETH (worth ~$7.34 billion).

The ecosystem's two largest optimistic rollups, Optimism, and Arbitrum, have simultaneously led Ethereum’s Layer-2 rollup ecosystem. This scaling infrastructure provides lower transaction fees and the potential for more accessible DeFi. As the legacy protocols of Ethereum mainnet look to expand to Layer-2 chains, they face several challenges. Let’s explore how Lido aims to establish liquidity, security, and dominance across Ethereum's Layer-2 ecosystems.

The Lido Layer-2 Proposal

Victor Suzdalev (also known as kadmil.eth), Core Contributor at Lido DAO, officially proposed expanding Lido DAO’s staked ETH (stETH) footprint across the Ethereum ecosystem. The proposal targets both Optimism and Arbitrum.

To date, the bridging of stETH beyond Ethereum mainnet has been primitive at best, partly due to the difficulties of the token’s yield-bearing properties. stETH accumulates staking yield via rebasing, which periodically attributes balance to the stETH token itself.

Due to the complexity of the stETH token contract, Lido also introduced wstETH, a wrapped version of stETH. wstETH is specifically designed for smart contract integrations. stETH holders can deposit their stETH in the wrapper contract to receive wstETH. Their deposits would then retain a constant balance while the rate of stETH backing the token continues to rebase. At any point, the wstETH holder can swap wstETH for an underlying amount of stETH held in the contract balance.

🎧 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+.

The Top Performers This Month from the Top 100: ABBC is a Payments Platform, Sperax is a Governance Token, Chiliz is a Sports Exchange, Tellor is an Oracle

Additional Coinstack Sponsors

Hive Digital is a leader in providing SEO and PPC services for blockchain, DeFi, Web3, and crypto companies. If you want to expand your organic presence and paid leads from Google and Facebook, get a proposal from Hive Digital at www.hivedigital.com.

🎧 Latest Episodes of The Coinstack Podcast

We have a new Coinstack podcast. So far we’re at 29,432 listens and growing!

Here are the episodes we’ve released so far...

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💬 Join The Coinstack Telegram Community

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📚 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.

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