💣 LayerZero Holds Lido Hostage

A weekly recap of the largest crypto events and narratives, with an extra dose of insight.

Here’s what we have for you:

• Hot economic data

• friendtech falters

• dydx chain to distribute fees

• Prisma introduces tokenomics

• Unibot buyback and burn

• FlokiInu launches a tokenisation platform

• LayerZero holds Lido hostage?

GM raiders. New week, new market. Last week, our fan favourite SBF took to the stand to testify. Well, he didn’t too much testifying to be fair. He admitted he thought that Alameda to spend FTX deposits, and that Alameda was exempt from FTX’s liquidation policies. To be honest, the words that came out of his mouth didn’t sound like someone who realised they had done something wrong, and sounded more like, I thought what we did was fine at the time.

In other news, economic data came in hot. Like red hot. Q3 GDP growth came in at 4.9% quarter-on-quarter, vs the previous quarter’s reading of 2.1%. You’re probably thinking, isn’t a fast growing economy good? Well I mean, good for the economy, maybe not so good for crypto prices. That’s because as the economy stays hot, then the Federal Reserve has a reason to keep interest rates higher for longer. And when interest rates stay high, risk on assets, such as crypto, don’t tend to perform that well. 

Lastly, Arbitrum Orbit is now live. Arbitrum Orbit chains are L3s that settle to Arbitrum’s main network. Arbitrum Orbit chains are essentially Arbitrum’s competitor to OP stack rollups and Polygon CDKs, so god speed Arbitrum, because it feels like we’ve gotten a large player launch an OP stack rollup every month for the past half a year.

-RektRadar

(3,3). Works fantastically when prices are going up. But also has some pretty disastrous effects when price goes down. Add an exponential pricing curve into the mix, and you get some pretty volatile movements to the downside.

Well, looks like that moment as arrived for friend.tech which is finally seeing some capitulation. Mid last week, roughly 84% of the total volume was from people selling keys. On a day-on-day basis, 219 out of the top 250 keys were down, and only 9 of them were up.

An exponential pricing curve means that the earliest sells made the price go down the most in absolute dollar terms. So whoever started selling first resulted in this cascading effect.

dYdX chain to distribute network fees

• Last week, dYdX announced that all fees generated by the dYdX chain will be distributed to validators & stakers on a block by block basis. For those who are considering migrating their dYdX tokens, this is fantastic news and should make for some greatly improved staking yields.

• In addition, dYdX’s public front-end for bridging will go live on October 30. As part of an alpha phase, stakers and delegators can help bootstrap the network’s stability and security. The more the merrier! Following that, a beta phase will take place where the protocol will become operational for limited trading.

Prisma introduces its tokenomics

• On November 2nd, Prisma will belong to the DAO community. Prisma released its long awaited tokenomics, with a max supply of 300M. 62% will be allocated to emissions, 20% for core contributors, 10% to early supporters, and the rest will be allocated to the DAO treasury and veCRV voters.

• Like other ve protocols, $PRISMA will have an innovative locking mechanism where token holders can lock PRISMA for a 1-52 week period. Pending that, lockers will receive various vote weights, and be able to vote in emissions and receive Prisma fees.

Unibot buyback and burn go brrr

• Previously, Unibot announced that the 1% going to LPs will be used to boostrap and ecosystem fund by buying $UNIBOT from the market. That is now live, with tokens being bought back and burned and reserved to reward users.

• As a token (no pun intended) of good will, devs have also extended the LP lock to 2027. Unibot has been shipping, recently releasing two new upgrades to its token sniper & auto-sniper functionality.

Tokenisation is the name of the game

Tokenisation is a trillion dollar industry. Or if you read enough of Chainlink’s tweets, you would think tokenisation will cure cancer. Well anyways, Floki, yes the memecoin Floki, is joining the tokenisation party.

Floki have announced their asset tokenisation platform, appropriately named TokenFi. To be honest, this wasn’t something I was expecting to see coming out of a memecoin project, but Floki has always been one of the slightly more business minded memecoin projects.

The website is now live, and the goal of the platform is to allow users to tokenise an asset in a simple all-in-one platform without a single line of code. It may sound silly, but with the financialisation of everything, tokenisation platforms will play an integral role in the future financial system.

Imagine being able to quickly tokenise your mortgage, your house, your car, songs you create, art you draw, vlogs you’ve recoded. Everything and anything really. And then putting those tokenised assets on the blockchain, unlocking a vast array of other opportunities from trading to revenue sharing to borrowing or donations.

As TokenFi has stated, the tokenisation market is projected to be a $16 trillion industry by 2030. Normally, these market size predictions are a little silly. But this is one prediction I’ll believe in.

LayerZero holds Lido hostage?

Last week, Layerzero announced that they had deployed wstETH as an OFT. That meant that users were now able to transfer it seamlessly between Binance Smart Chain, Scroll, and Avalanche. Whenever a user submits a bridge transaction, LayerZero will proceed to burn the token on the source chain, and once verified it has done so, mint the token on the destination chain.

Importantly, the token minted is LayerZero’s version of wstETH instead of Lido’s official version of wstETH, which to date, does not exist on the above mentioned chain.

This didn’t sit well with many Lido contributors as they felt like LayerZero was frontrunning them through deploying this OFT, and in some sense, forcing Lido DAO to adopt their solution as the de facto bridging solution. 

LayerZero did hint that they were going to do this through a forum post. However, the forum post wasn’t asking for support. It was merely stating that if approved from the DAO, they would transfer ownership of the wstETH contracts to the DAO.

Essentially, Lido felt like by deploying this solution, LayerZero is strong arming them into a solution that may not be optimal, especially from a security perspective.

However, I beg to differ. It’s a permissionless world, and we’re all living in it. Developers are allowed to integrate tokens however they want. Isn’t that the whole premise of why blockchain?

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