⚡Deflation and Dencun Push ETH to Forefront
Plus memecoin season, Solana activity spikes, and more
The Dynamo DeFi newsletter covers trends, on-chain analysis and tools in crypto each week. Be sure to also check out my YouTube for more regular content.
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📈Trends and Narratives
Deflation and Dencun Push ETH to Forefront
Since the merge, 1.4M ETH has been burnt, making the ETH supply deflationary.
With on-chain activity picking up, this narrative has become more poignant recently, with the deflation reaching an annualized rate of 1.095% over the past 7 days.
While Ethereum fees have surged again in recent weeks, that hasn’t stopped on-chain metrics from rallying. Despite being the largest network for DeFi by a long shot, over the past month Ethereum’s TVL grew the second most in percent terms out of major chains (surpassed only by Bitcoin).
And the Ethereum ecosystem could become more useful for retail users in the near future. The Dencun upgrade, which implements protodanksharding, is scheduled to go live on March 13th. This upgrade promises to reduce L2 transaction fees.
How to Capitalize
Hold ETH and find opportunities to earn yield, such as EigenLayer and the larger liquid restaking ecosystem.
Invest in ETH beta plays, such as L2s. With Dencun making L2 fees cheaper, that’s likely to push more activity to those chains.
Meme Season
Last Monday, Bitcoin explosively traded from 52K up to a high of 64k on Wednesday, giving BTC it’s highest monthly close ever.
As soon as BTC took a breather, traders skipped alt season and went straight for meme season.
What does this mean for prices moving forward? Historically, tokens with no utility pumping is a sign of a frothy, unsustainable market. Should we pack it up? Some argue that memecoins are becoming an outlet for global speculative liquidity.
How to Capitalize
There’s a real possibility that this is just the beginning. There will be lots of volatility on the way. There will also be many opportunities that fight for your attention, which may be the scarcest resource of all. Protect your attention, take steps to stay level-headed, and develop an exit strategy that you will stick to.
Have an exit strategy and plan to stay level headed if you hit big wins. Feel free to share your plan on Twitter and tag me.
⚡Monthly Dynamo DeFi Pro Call This Week
The premium version of Dynamo DeFi gives you deeper insight into the crypto market. This Wednesday at 6pm EST, we have our monthly Zoom call to discuss the latest market trends.
For $11/month (less than lunch in most countries), premium subscribers get:
⚡Discord to discuss on-chain data and trades. Learn more here.
⚡Community calls & AMAs in Discord. 3X per month I’m holding community calls and AMAs in the Dynamo DeFi Discord.
⚡Exclusive newsletters & on-chain data indicators. Actionable insights about which tokens have strong fundamentals. Plus special in-depth reports.
⚡Pre-recorded videos. These will be longer in-depth videos where I show my research process. View past videos here.
⚡Monthly group calls. Each month, I’ll conduct a group video call to discuss the market, latest crypto trends, and more. Premium subscribers can access calls here.
🔢On-Chain Analysis
Solana Activity Rebounds to New Highs
DEX trading on Solana more than doubled this week, breaking its all-time high from December and surpassing Ethereum mainnet on several days. After losing momentum in the wake of its first network outage in over a year, this jump in activity could reignite the Solana narrative.
Stablecoin Supply on Base Rallies
The quantity of stablecoins on Base, Coinbase’s L2, jumped by 18% this week, a significant increase. As Coinbase has a massive userbase to potentially push on-chain, Base is an upstart chain to watch.
🛠️Tool Spotlight
Track ETF Inflows
Institutions are bidding. With every day the Bitcoin ETF is out, more and more is accumulated into ETFs. This account, HODL15Capital, publishes data daily about these flows. Last week alone, over 30K BTC entered ETFs. In total over 147K BTC has entered ETFs by now.
Transform Your DeFi Skills with Double Your DeFi
My friend The DeFi Edge and I are teaching another cohort of our Double Your DeFi course this April. This is an intensive course to transform your DeFi skills in 5 weeks.
Spots are limited and this course is on track to sell out.
📅Key Events This Week
Macro Events
📊 FOMC member Barr speaks - March 5th
📊 FED chair Powell testifies - March 5th
📊 FED chair Powell testifies - March 7th
📊 FOMC member Mester speaks- March 7th
📊 FOMC member Wiliams speaks- March 8th
Token Unlocks
🔓 LQTY (0.75%) - March 5th
🔓 GAL (2.26%) - March 5th
🔓 HFT (3.77%) - March 7th
🔓 IMX (1.39%) - March 7th
🔓 GMT (1.75%) - March 8th
Launches
Note that these launches are mostly unvetted by the Dynamo DeFi team and this isn’t an endorsement of any of them.
🚀 Apex protocol staking 3.0- Mar 4th (Source)
🚀 Fringe finance incentive program - March 5th (Source)
🚀 OccamFi interswap Launch- March 6th (Source)
🚀 Magic craft game launch- March 6th (Source)
🚀 Aether games IDO- March 6th (Source)
🚀 OP Goerli deprecation- March 7th (Source)
🚀 Fedoraverse launch- March 8th (Source)
🚀 Alverse launch- March 8th (Source)
🚀 Sipher alpha launch- March 8th (Source)
🚀 Hydranet NOVA wallet closed Beta- March 9th (Source)
That’s all for this week. For more frequent content, follow me on Twitter and YouTube.
Until next time,
Dynamo DeFi