80th Edition
Feb 11, 2023
It's the end of yet another eventful week in crypto! We decided to cover one of the most awaited events of this year. Do you know what happens after the Shanghai upgrade? Read on to find out!
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Let us talk about the upcoming Shanghai Upgrade.
It has nothing to do with the major financial hub in China but a much-awaited event for several Ethereum maxis (read: fans).
Why?
👉🏻This upgrade allows stakers to get their staked ETH unlocked!
👉🏻These people locked their tokens sometime after 01st December 2020 to secure the Ethereum Blockchain.
Now there are 3 parts to this staking:
⁉️ The minimum amount of ETH required to be staked was 32 ETH! How many people do you know holding such a large ETH bag?
🤯 It was a significant event because nobody knew the exact date when they would be able to reclaim their ETH back!
🥁 These stakers would get rewarded for depositing their ETH. However, the rewards would also be locked until the upgrade completes.
That’s sweeeet! But why is this upgrade such a big deal?
Well, despite being one of the most advanced cryptocurrency networks, Ethereum has among the lowest amounts staked.
The total staked ETH is 14%, as compared to the average 61% across all other tokens where staking is available.
We believe that the Shanghai upgrade is going to indirectly encourage more people to stake their ETH.
Why, you might ask!
Again a two-part answer:
➡️ For the large institutions that staked their holdings, it makes more sense to get new validators (read: massive holders of ETH who keep supporting the network) rather than book profits at current prices, more so because ETH is way below its previous all-time high.
➡️ Individual stakers, who took the pain of keeping 32 ETH locked away, are the real believers. These people believe in the idea of ‘The Flippening.’ ( such as the writer of this newsletter, who didn’t have 32 ETH but decided to contribute in any way possible ). These people are not going to sell just yet.
If you’re still here, let me tell you what happens when more ETH gets staked.
Imagine that Ethereum hits the average 61% staking as the other blockchain networks. At current prices, that would amount to $112 Billion worth of ETH being staked! And that is massive.
It serves two purposes. First, the Ethereum blockchain becomes much more secure. Next, the price of ETH will likely move up by leaps and bounds because of the reduction in supply from the market. 61% of all ETH would be locked, remember?
Well, only time will tell!
Do you want us to cover more such topics in our weekend edition?
Or do you want to read the news first?
Crypto jargon of the week
Explain Like I'm 5
" Liquid Staking "
We just talked about how several participants locked away their ETH to support the blockchain network and also earn rewards.
Now imagine that you didn't want to lock away all that ETH. You didn't have 32 ETH to begin with. You have smaller amounts, say 4 ETH and still wish to earn the rewards. You also wish to get back your ETH at any given point.
Liquid Staking allows you to get tokens that represent the amount of ETH you wish to stake. You can keep these tokens in your wallets. You can also sell these tokens in decentralized exchanges and get back your ETH!
Thus, liquid staking removes the entry barrier to ETH staking.
Major events of the Week
1. Riding the hype train
While most major cryptocurrencies have only seen sideways movement in the past week, AI tokens have received a huge boost from the booming popularity of ChatGPT and other AI systems. In fact, AI tokens like FET and AGIX have clocked in gains of over 50% over the past week. AGIX also registered a 17-month high of $0.59 on Tuesday, while FET scaled heights it hadn't seen since January 2022.
Our takeaway: AI's taking over the world by storm, and AI tokens have been reaping the rewards. With ChatGPT revolutionizing how people have been doing so many things and new use cases popping up constantly, its importance in everyday life might not diminish anytime soon. The question is, are you backing the AI horse in the race to the bull market?
2. Changing with the times
Activity on the Bitcoin network recently reached levels it hadn't seen since Q2 of 2021! This uptick in activity follows the deployment of the Ordinals protocol, which allows users to store NFTs on the Bitcoin blockchain. This has led to an exponential increase in NFT activity, with over 13,000 Ordinals being minted since December! It has also sparked a debate within the community on whether this is an appropriate use case for the Bitcoin blockchain.
Our takeaway: When the going gets tough, life Bitcoin always finds a way. Despite macroeconomic conditions not being in its favor, Bitcoin has managed to attract users to its network. And while prices may be down right now, BTC's never stayed down for too long. So keep an eye out for a movement reversal into the greens.
3. One for all, all for one
On February 5th, StarkWare announced its plan to make its zero-knowledge technology open source in the pursuit of making Ethereum more scalable. This technology currently makes transactions cheaper and faster on the Ethereum network. By making it open-source, Web3 developers can copy and alter the source code. They would also be free to distribute these modified versions without worries about royalty payments.
Our takeaway: This announcement cements StarkWare's commitment to helping blockchain technology grow as a whole. Open access to the source code of this revolutionary tech will go a long way in boosting Ethereum's scalability, allowing StarkWare to collaborate with developers and solve problems more efficiently.
Beyond our top headlines:
- The Web3 community raises millions to help Turkey following earthquakes. Crypto's always been for the people. Read here.
- Twitter will share ad revenue with creators, says Elon. A viral tweet could now pay your bills. Read here.
- Metamask joins hands with Onramp.money for UPI payments in India. Crypto's getting more accessible by the day. Read here.
- Ethereum runs ETH staking withdrawals on testnet. One step closer to the flippening? Read here.
Disclaimer: All price movements are recorded up to 03:30 PM UTC, 10th Feb 2023
After a great few weeks in the green, macroeconomic factors seem to have caught up with cryptocurrencies to disrupt the streak.
Disclaimer: All price movements are recorded up to 03:30 PM UTC, 10th Feb 2023
Valentine's week seems to have gotten most sectors turning red as well.
Coin of the week 💸
Algorand: $ALGO
The Algorand Foundation has announced several partnerships, including collaborations with schools, colleges, educational programs aimed at higher Web3 adoption. The keep-your-head-down-and-build approach has been working for them. We feel that ALGO has a fundamentally strong potential. It might be a good time to start DCAing.
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