⚡Is Regulation About to Become Crypto’s Biggest Ally?
Plus new exchange listings, Linea TVL grows, 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
Is Regulation About to Become Crypto’s Biggest Ally?
Last week, the SEC approved 8 spot Ethereum ETFs. This is huge news, and unexpected by many until a few days beforehand. The odds on Polymarket at the start of last week were just a 10% chance of approval:
The ETFs are the biggest ‘win’ for broad acceptance of crypto since the approval of Bitcoin ETFs. While this is a big deal, perhaps something even bigger is brewing with the U.S. Government.
In recent years, US regulators have put significant pressure on the crypto industry.
The SEC sued or indicated an intention to sue companies like Coinbase and Uniswap Labs.
Industry players widely talked of having no good way to register.
Some members of Congress even spoke of building an “anti-crypto army”.
This adversarial environment pushed entrepreneurs abroad and called into question the future of the US crypto industry.
In addition to the SEC approving the ETFs, this week Congress passed the Financial Innovation and Technology for the 21st Century (FIT21) Bill. This bill establishes a regulatory framework for crypto and clarifies which tokens are securities vs commodities.
And the good news for crypto just kept coming this week. After passing FIT21, Congress also passed a bill forbidding the Federal Reserve from creating a CBDC, increasing the chance that future stablecoin adoption takes place on public blockchains.
In the month of May:
8 ETH ETFs approved
Trump publicly endorsed crypto and his campaign is accepting crypto donations
House of Representatives pass FIT21 and anti-CBDC bill
It looks more and more likely that crypto has reached escape velocity, beyond which regulation is politically unviable to cancel it entirely. Exactly what crypto and DeFi will look like is still playing out, but they are here to stay.
How to Capitalize
Both the Ethereum ETFs and bills like FIT21 show public appetite for crypto. Zooming out, I see us entering a secular adoption cycle in which more and more assets move on-chain.
While there are benefits to keeping up with the day-to-day, I believe the ultimate tools needed to take advantage of this trend are conviction and patience. Crypto is going to be a 10 trillion dollar asset class and you only need to claim a small part of that to change your life.
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🔢On-Chain Analysis
Linea TVL Grows 134% in 14 Days
Linea, the Ethereum rollup developed by Consensys, has experienced a massive surge in activity over the past 2 weeks, bolstered by its LXP points program. In total, Linea’s TVL has more than doubled, making it the fifth largest rollup, behind Optimism.
Notable dapps in the Linea ecosystem include Nile Exchange, a DEX which grew 465% in the past month, and LayerBank, a lending protocol which grew 2935% on Linea in the past month. You can participate in Linea’s points program yourself at this link.
🚜Farm of the Week
LISA Lab
LISA Lab is a Liquid Staking protocol built on Stacks. The protocol is fairly new and rather small - only $16M in TVL - but many users don’t realize ‘Stacking’ on Stacks Network has a native BTC yield. Using this protocol is a great way to keep your liquidity while earning Bitcoin and earning protocol points for a potential airdrop.
How it Works
If you hold Stacks STX token, you can ‘Stack’ it in order to support the network. Stacking rewards are paid out via BTC, which is pretty cool. You can Stack through pools, or through Liquid Stacking Protocols like LISA.
To Stack through LISA, simply deposit STX and receive LiSTX in return:
You can use LISA’s LiSTX token throughout the Stacks ecosystem while earning BTC on your deposited STX. Additionally, you’ll earn points for a potential future airdrop:
Currently there are less than 4,300 participants in this point system. With fewer participants, the farm is less competitive, meaning bigger opportunities for the farmers.
Risks
LISA as a protocol is quite new, and only has $16M in TVL. While this is enough to use the protocol, it certainly isn’t battle-tested. Proceed at your own risk.
🛠️Tool Spotlight
Track New Exchange Listings with ListingSpy
A common way to find tokens is through new exchange listings. In the past, that often meant manually checking announcements and new listings pages on dozens of exchanges. Thankfully, in 2024 there are tools that make this process easier. One such tool is ListingSpy, which tracks new listings both on DEXes and CEXes.
📅Key Events This Week
Macro Events
📊Memorial Day, US Markets Closed - May 27th
📊Q1 2024 GDP Data - May 30th
Token Unlocks
🔓 AGIX (0.68%) - May 28th
🔓 ALICE (2.08%) - May 28th
🔓 PORTAL (0.62%) - May 29th
🔓 OP (2.88%) - May 30th
🔓 STRK (1.07%) - May 30th
🔓 PRIME (4.23%) - May 31st
🔓 MANTA (0.74%) - May 31st
🔓 TORN (2.41%) - May 31st
🔓 BTRFLY (1.88%) - June 1st
🔓 SUI (2.78%) - June 1st
🔓 1INCH (8.52%) - June 1st
🔓 DYDX (11.92%) - June 1st
🔓 ZETA (1.99%) - June 1st
🔓 ACA (2.85%) - June 1st
🔓 ENA (3.62%) - June 1st
Launches & Updates
Note that these launches are mostly unvetted by the Dynamo DeFi team and this isn’t an endorsement of any of them.
🚀 Solana v1.18 upgrade - May 27th (Source)
🚀 Dora vota incentivized testnet 2 - May 27th (Source)
🚀 SEI V2 launch - May 27th (Source)
🚀 Stargate V2 launch - May 27th (Source)
🚀 IDEX incentivized testnet beta - May 29th (Source)
🚀 Bazaar P2P marketplace launch - May 29th (Source)
🚀 Stellar’s stable release - May 30th (Source)
🚀 Blendr beta platform launch - May 31st (Source)
That’s all for this week. For more frequent content, follow me on Twitter and YouTube.
Until next time,
Dynamo DeFi