🦧 $26BN Ethereum Unlocks in March, Shanghai Update

plus...Elon HODLs his Bitcoin, Trader Joes Arbitrum Adventures & MORE

Gm gm mates!

Another strong week in the markets with Bitcoin inching closer to $24,000 and Ethereum sitting pretty at the $1,600 zone. Earnings season for big tech is kicking off with a surprise coming from Telsa (please don't dump on us Elon!)

This week's big news comes in the form of the successful Ethereum Shanghai Shadow fork test. What does it really mean? Well, come March there will be $26bn worth of Ethereum unlocked...but what happens next?

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The TLDR of what’s inside.

🔥 The Big Topic. What does the Ethereum Shanghai Update Really mean?!🗞 Hot Crypto News. Twitch Co-Founder moves gaming platform Fractal from Solana to Polygon, Elon HODLs his Bitcoin whilst Telsa Earnings beat expectations, Porsche mint dump then pumps PLUS Aptos....the secret winner AND MORE.👀 Updates Across the Bloc. AAVE heads to Latin America, Messari releases a 2023 tweet thread on Top 10 Trends in CeFi, Index Coop launch dsETH a Diversified Staked ETH Index, MakerDAO deploys $100m USDC into Yearn AND MORE.🛡 Chart of the day. Andre Makes $FTM GREAT again!

🔥 The Big Topic.

What does the Ethereum Shanghai Update Really mean?!

Shanghai will open the floodgates to $26BN dollars worth of Ethereum.

Roughly 13.5% of the total supply with about 65% of stakers being in the red from being a few pennies down to absolutely rekt.

JFC, March is going to be one exciting month for Ethereum, the bag holders and all of the CT fanboys, larpers, and engagement farmers.

A quick TLDR history lesson

Ethereum was all the rage last September as the network moved from the original Proof of Work model to Proof of Stake, going down as one of crypto's most historical moments. Partly because it went so smoothly and also because it was arguably 2022’s biggest 'buy the rumour, sell the news event'.

Originally the Shanghai update (EIP-4895) was set to include Proto-Danksharding (a much-needed improvement to L2 roll-ups' scalability) and EVM Object Format (EOF, which is a new smart contract format for EVM) in favour of releasing the withdrawals update with haste!

Shadow Fork goes LIVE

On Monday Ethereum Core Dev, Marius Van Der Wijden announced the successful deployment of the first mainnet Shadow Fork. See this as the dress rehearsal to test the capabilities of staked ETH's withdrawal function.

There were a few hiccups spread across 12 blocks but the dev team did what they do best and addressed the issue ready for the next round of testing.

So, it still looks like we're set for March 2023 being the official release.

PS, if you were wondering what an “evil node” was, Marius sums it up as: “It sends bad blocks, bad network messages, etc, and tries to trick other nodes into joining the bad chain.”

So what happens next?!

Well, devs do dev stuff to make sure that there is absolutely zero chance of this going wrong, causing mass panic and a sell off on the levels seen only by the SBF fiasco.

In layman's terms…

Chillin with the lads in mum's garage as the Ethereum Developer team did waiting for the Ropsten merge back in June 2022.

Ok, ok, now what happens after the after is slightly unknown. But there is a bullish case to be made as stakers will get the freedom and flexibility back to their stack of staked ETH.

Shanghai also opens up many new doors that, once regulation and institutional confidence come back, could see capital rush back in, just like the mad gold rush of the 1840s (or the stimmies of 2020).

Benefits for CoinBase

Jim Cramer called bullish on CoinBase from Day 1 as the price continued to dump harder than most of my microcap bags but still… the centralised exchange could find a huge upside from the update.

CoinBase, second to Lido, holds the largest position of staked ETH on the beacon chain, over 2,071,424, generating approximately $50m annually in rewards. With CoinBase being one of the largest, user-friendly centralised exchanges in the world it could be the very place to spark an inflow of retail normies and institutes.

After all, having the freedom to unstake may result in more normies restaking and whales performing more complex DeFi strategies.

If you want to take a real deep dive into the numbers check out Hildobby’s Dune Dashboard.

Our Take

Truth be told, it's a great narrative play given that it's pumping Liquid Staking Derivatives (LSDs) while also bringing to light future narratives such as Eigen Layer - a platform to leverage Ethereum security (podcast coming soon on that).

Chances are there will be a sell-the-news event and a host of drowned bag holders dumping.

But the real question is how fast the dump gets slurped up by those accumulators and whales who see Ethereum as the end game.

🗞 Hot Crypto News.

🐮 Bullish

Polygon's latest strategic investment, sees Twitch Co-Founders' web3 gaming platform Fractal move from Solana to Polygon. Joining the likes of Reddit, Starbucks, y00ts and Magic Eden who are all calling Polygon home. Twitch Co-Founder commented saying "Our goal is to support game developers, and part of that is being wherever the game developers want to be."

Tesla HODLS! Chief Twit is known for dumping his Tesla bags but despite turbulent markets has HODL'd his Bitcoin bags in Q4. Tesla posted favourable earnings after hours on Wednesday with Q4 revenue beating expectations at $24.32 billion vs $24.16 billion. In Elon, we trust... again?

Aptos, I think we have all fudded the Layer 1 blockchain as an SBF scam project as it continues to break all-time highs. Up almost 540% from its December lows at $3.07 reaching a peak of $19.49. Even Jedi can't quite believe it!

🐻 Bearish

Porsche NFT mint flopped, as high supply and minting price caused a fud storm on Twitter. However, Porsche cut the supply from 7,500 to 2,363 pumping the secondary market as high as 3.3 ETH.

Robinhood and his not-so-merry men, as the commission-free investing platform has its Twitter hacked promoting a Robinhood BSC scam project rugging unsuspecting users of over $16,000.

FTX owes even MORE money, adding media giants the Wall Street Journal, Fortune, Fox Broadcasting to the list along with Netflix and crypto exchanges CoinBase and Binance to the list. This is just the tip of the iceberg as the 116-page creditor list highlights Airlines and even Stanford University where SBF's parents are professors. Where does this stop?!

👀 Updates Across the Bloc.

Project Updates

AAVE heads to Latin America as the Lemon App Card integrates the AAVE protocol bringing in over 1.7m users.

ARKHAM INTEL, a wallet tracking platform announced a partnership with Polygon.

CORE DAO announces a successful integration with Layer Zero.

FACTOR DAO launched their first in a host of Twitter spaces called The Key Factor featuring Camelot Dex on Jan 26th at 4 PM GMT.

INJECTIVE launch a $150m ecosystem fund backed by Pantera Capital, Jump, Kraken Ventures, Delphi Digital and more.

INDEXCOOP introduced dsETH a Diversified Staked ETH Index which gives holders exposure to Rocket Pool’s $rETH, Lido's $stETH & Stake Wise’s $sETH2.

MESSARI release their 2023 tweet thread on the "Top 10 Trends in CeFi" an interesting one to read given the chaos that was caused last year in CeFi.

PANTERA finally release their 2023 outlook - get 10 key takeaways from the report by following the link.

PREMIA Knox Vaults go live on Aribtrum. Deposits are already open and limit orders can be placed on Thursday, Jan 26th with auctions starting Friday, Jan 27th.

TEXTURE PUNKS. The minting schedule goes live with open minting on Friday, Jan 27th. Build your own Crypto Punk. Word on the street is one of the ETH devs is behind it with ETH devs minting first.

TRIDENT DAO has updated its raise options and tokenomics post-Arbitrum launch.

TRADER JOE. Phase 1 of JOE's Arbitrum Adventures quest series begins on Jan 27th where guild members can win prizes, so can I speculate for a sec? Wen Arbitrum airdrop?!

Governance Updates

CANTO, the proposal to initiate the chain upgrade for Contract Secured Revenue (CSR) and Base Fee Burn was submitted on Wednesday, Jan 25th. TLDR: this gives devs a percentage of fee transactions paid to the network when users interact with the smart contract.

AAVE. The vote to activate the Aave V3 Ethereum Pool has been passed and the listings will include WBTC, WETH, wstETH, USDC, DAI, LINK, and AAVE

SONNE FINANCE, a non-custodial liquidity market protocol has submitted a proposal to apply for an Optimism Grant.

UNISWAP temperature check proposal to deploy Uni v3 BNB passes with 80% in favour.

MAKERDAO passes the vote to deploy $100m USDC into Yearn with over 71% in favour.

🛡 Chart of the day.

Andre Makes $FTM GREAT again!

Zoom out to the weekly and it's clear as day. $FTM is on the verge of a weekly break out over the 50EMA and en route to recover the red vector candle sitting at $0.69 (the irony!) with potentially a clear runway sending it to $1.68, 240% from its current price at $0.46.

Fantom hasn't failed to deliver in 2023 up over 200% from the November lows at $0.16.

Will Andre's war chest and gas monetisation make the $FTM token great once again?

Bull case: Break the 50EMA and $0.52 overhead resistance and we would expect a clear run to $0.69.

Bear case: The ghosts come out to play sending it back down to retest the $0.31 mark.

Coming up next week:

Most notably the FOMC conference on Wednesday, Feb 1st. Will this stop the rally in its track or fuel it for the next leg?

And on that note, thanks for reading, catcha apes in the next edition!

Grant, Jedi & Dan 🫡

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