🏃‍♂️ Are Devs Running to AppChains?

Binance gets exploited, Celsius dox's clients and a Big Mac n Fries please

It was a fairly uneventful week in the charts….until someone went and decided to hack and exploit Binance for $600m, what a way to start the weekend off with good vibes!

But the good news is we can now pay for a Maccas with Bitcoin or Tether.

Anon, welcome to your Friday newsletter!

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In Todays Enclosure

• The Big Topic - Are Devs Rage Quitting to AppChains?• Bitesized bits - Binance gets exploited, Celsius dox's clients and a Big Mac n Fries please• Chart of the day - $BTC and volume nodes to look for• Hidden Alpha - 🕵️‍♂️

🔥 The Big Topic - Are Devs Rage Quitting to AppChains?

Devs are on the verge of rage quitting and moving on from the constant congestion, network downtime and gas fees so high you could go for a 5 course Michelin-starred meal?! Yes, but no, but maybe not just yet. The AppChain thesis has been in the spotlight again recently so let’s take a look at what it is and why you should care as a degen.

In the current wild wild west of Web3, the majority of devs build dApps on Ethereum, which makes sense as they had first-mover advantage but it gets congested and gas fees can be more than the rent of a London apartment. This brought to life other major L1s such as Solana, Polygon, Fantom, and Avalanche. But even in the quest to be cheaper, faster, and more scalable these so-called Ethereum killers have also run into a number of problems. I mean just look at the number of times Solana rage quits on us!

Now comes the L2’s. These are the dApps that are built on top of the L1 blockchain thus meaning they need to duke it out to get their share of the finite resources that are present on the blockchain… kinda like a bunch of gossiping noisy neighbours that put the world to right over a cuppa tea and have to rock paper scissors for the final rich tea biscuit. Talk about going the long way around!

This is where the case for App Chains comes in.

So, what is an app chain?

Simply put, it is an Application Specific Blockchain meaning each dApp will run on its own blockchain, that's pretty cool right?! Imagine the potential benefits of Uniswap running on UniChain…Mev bots…BEGONE!

Crypto is still in its infancy and it’s still a builders market out there so developing the most efficient foundational infrastructure just makes sense. So let’s give devs the right tool kit to allow for smarter, faster technological innovation to happen to bring all those normies that were here in the last bull run, back in *oh the memories!*

So an AppChain is basically getting rid of all of the noise that is experienced on a public blockchain, like Ethereum, Solana and Avalanche, to allow for a cleaner more efficient experience by allowing for the full utilisation of the resources based on the project’s specifications.

Why are Appchains important?

Flexibility, a developer has much more freedom to program in the language he or she likes as often smart contracts will be programmed in a specific language along with the constraints of specific virtual machines (eg EVM). This allows the developer complete freedom and control over the environment in which to build. Need more security? No problems. Fancy using a different language? Sure…no problems! Remember, in a builder’s economy we need builders to be able to build cool stuff that the masses will flock to.

Scalability. Ahhh, that age-old buzzword that everyone and their grandma is trying to solve in the world of crypto right now. What an AppChain can allow for is better scalability through increased transaction speed and reduced gas fees (thank you!) by not having to compete for the same resource pool. Remember when BAYC did their Otherside land sales and gas fees were in excess of $3,000 and you couldn’t ape the dip on your favourite UniSwap coin?! Yeah, this will help solve that issue. NFTs and gamefi both have high throughputs so we might see these two areas utilise AppChains first. Long term this could be one of those things that put the accelerates on to allow for mass adoption as NFTs (can) look pretty and we all love a good game of Candy Crush.

Customisation. Developers need to keep up with the times and the ever-changing demand of what the end user wants and be able to make the right conscious trade-offs, with increased flexibility an Appchain might be the right way to go. Plus a tradfi company could, in theory, dip its toes into the world of crypto by building on one.

It’s not all sunshine and rainbows

Whilst it all sounds good in theory, which it potentially is, you’re essentially building in isolation away from the mother chain and just plugging in to capture the liquidity that’s available. For small projects, this might not be the smartest way to go.

Other limitations that a team might want to consider is the limits to composability and atomicity, liquidity fragmentation (bridging over from the mother chain), reflexive security model, and limited “out the box ready to go” tool kits.

Our Take

Appchains aren’t a new thing and looking back at it both Polkadot and Cosmos were the first movers when they identified the importance of cross-chain interoperability and actively wanted to bridge Ethereum over into their ecosystems. Moonbeam was the gateway to Polkadot as was Evmos to Cosmos.

This all comes at the right time as bear markets are for building and builders are building, VCs are aping and global recognition be recognising. Retail money will be back and we will be ready for it.

IYKYK and if you didn’t here’s a quick bit of terminology for you, Binance has their Side Chains, Polygon calls it Supernets, Avax claimed land to the term Subnets and Cosmos has Zones….confusing I know!

It really is, as the saying goes, 6 of one and half a dozen of the other, and what’s going to be very interesting is seeing how someone like dYdX get on building the dYdX chain, over in the Cosmos and takes advantage of the benefits of the IBC. The reason to care is we might see more innovation coming into the space to bridge back into the real world as more and more companies take a leap of faith into the world of crypto. Plus that means we, as well armed knowledgeable researching apes, have more to ape into and profit on.

🗞 The Bitesized News Bits

Can I get a Big Mac n Fries with that? McDonald’s is making tough times bearable as you can now pay for your Maccas with Bitcoin or Tether.

Celcius leaks private client information, which could have major ramifications for those users who have not yet filed taxes. Including a $160k private Celcius meet-up event.

Another bridge burnt, as hacked attempts to steal close to $600m in BNB tokens which approximately $100m siphoned off to other chains.

Fidelity apes $5m into Ethereum on behalf of one of their clients for their Ethereum Index Fund. What else have the institutes been buying? Is the bottom in?

Strength in LUNC, as the community continues to build and rally behind the movement with social dominance hitting 2.12 million social mentions and 1.9 billion social engagements.

PS. Are you a builder? Yes…perfect! Our friends and sponsors at HXRO have a number of opportunities for you to build with HXRO. Check this tweet out or message @RobbyLevy or @hxROBtc for more info.

🛡 Chart of the day: $BTC

Our Take

It’s been a range-bound week for Bitcoin, which has been kinda boring to watch BUT market makers have been building their positions and slicing through traders’ stop limits and liquidating the late entrants.

Anon, if you noticed there are 3 little arrows on the chart where volume and liquidity is present and these volume nodes are areas of interest for the market maker as he may hunt and push the price in that direction. Right now, it seems as if Bitcoin is in no man’s land waiting for a reason to either fully send like a Friday night or completely nuke.

Bull case, we break through the $20,500 marker and recover the imbalance on the chart that sits between $20,500 and $22,800. A huge upside if the macro allows for the narrative to play out.

Bear case, we flop back down to where the point of control (POC) is located in and around the $19,000 mark.

🤝 Here’s the Deel

and a quick word from our super awesome sponsors who help us make this all possible

If you are a builder in this space and are hiring a remote-first team take a look at one of our partners, Deel. They allow you to hire, manage, onboard, and pay from anywhere in the world without the hassle. Yes, Deel allows you to pay your team in crypto too…

🦧 Updates from the bloc

The latest thread

Decision fatigue is one of the most annoying paralyzing emotions anyone can feel that usually leads to either no decision or the wrong decision. We all get bamboozled in the crypto space when deciding which one of the 6.9 million projects to invest in or narrative to research. Here’s one of my favourite threads from @TheDefiEdge as he gives a refreshing reminder of how to keep it simple.

The latest podcast

In this epsiode we sit down with @YettyWapp and @Lorem to deep dive into how Vendor Finance is adding a twist to lending and borrowing on Arbitrum.

Alpha hint, lenders choose their own terms and borrowers don’t get liquidated?!

🎉 Friday Win of the Week

😂 this kind of sums up the last 18 months in the wonderful world of crypto.

🕵️‍♂️  Hidden Alpha

Soooo you want a 5-minute head start against the rest of the market, well here are our picks to add to your watchlist:

Swise & Umami, Interesting liquid staking modules are being built to allow single actors, DAOS, protocols, and basically anyone to have their own validators node with liquid staking on Ethereum.

Stables, responsible trading through chop.

🦍 The Ape Enclosure

We’re ready to ape in, at any time. Got a good idea that needs funding? Send us an email with all of the info to [email protected] - Equally, if you would like your project to be featured in our Sponsor Section, contact us and we will see if it is a good fit for our audience!

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