Are the Bulls coming Back?

Layer 2 M

Jan 08, 2023

Good Morning Saints,

Hope you’re having a wonderful weekend?

If you’re reading this, you’re always one of the chosen Saints and you’re special.

Now, let’s get to the topic of the day……Grab a cup of coffee and let’s chill.

Here’s what we’ve got today:

The DeFI Saint Recap for the week
Updates on L2s and Protocols building on L2s.
Alpha from other Chads.

The DeFI Saint Recap for the week

The past few weeks had been quite impressing and amazing following the recent events happening in the market.

I see this year 2023 as the year of different narrative plays

Below are different narrative plays to keep an eye on

Liquid Staking Derivatives (LSDs) e.g $LDO, $RPL, $FXS and $SWISE.
HyperScaling Solution (Eigen Layer).
NFT Financialization (NFTFI)
Layer 2s
Modular Blockchain (e.g Celestia)
zkEVM
Decentralized Social Media (e.g Lens)
Privacy (e.g Aztec)
Modular Blockchain (e.g Celestia)
Bridge Aggregators (e.g LIFI, Bungee, Rango and VIA)
Meme Coins.

Now let’s look at few of these narratives

Liquid Staking Derivatives

LSDs aim to secure the network based on trusted validators and Ethereum migrating from POW to POS after the merge have been a huge spotlight to these LSDs.

Following the Shanghai upgrade which is expected to arrive late Q1 2023 has made these LSDs to gain a lot of traction most especially on $LDO, $RPL, $SWISE and $FXS.

Let’s see how these has performed in the past 7 days

Before that, LSD TVL according to DefiLlamma is $9.32B and now the third most TVL in DeFI Category.

So, this is how these LSD protocols has performed over the past 7 days.

$SWISE has outperformed all, followed by $SD.

Keep an eye on these low cap gems, because when the narrative goes hot, easy '“Xs” on these tokens.

Also, Here’s a well detailed thread on LSD Narrative by Hartvigsen

Thor Hartvigsen @ThorHartvigsen

Thread🧵 Liquid Staking Alpha🕵️‍♂️ Has the liquid staking narrative peaked already, or is it just beginning to take off? And should you bet on the market leader $LDO or smaller protocols? I've collected all the data in one place. Get a complete overview in just a few minutes👇

After the shanghai upgrade which will enable withdrawals for stETH on the beacon chain, LSDs will keep on being the centre of attraction for securing the ETH network and also expect to see LSDs Wars in battle for TVL and APR.

Here’s a recent tweet i made of the LSD wars and its Catalysts.

Permissionlessness.ETH 🦇🔊 @TheDeFISaint

Missed $CVX wars, Watch out for LSD wars with the upcoming Shanghai Upgrade which will enable withdrawals for ETH Stakers and Validators. Keep an eye on LSD tokens. Currently $FXS has the most APR. Catalyst: Backed by FRAX Finance Products.

HyperScaling Solution

What’s Next after stETH are withdrawn once shanghai upgrade is complete??

This question was everyone’s nightmare as once stETH are withdrawn will lead to a lot of selling pressure, but i guess that’s not a big deal anymore.

Here comes “Eigen Layer” which is hyperscaling ethereum by providing a re-staking solution to power services like Dapps and oracles aside securing the Network.

To understand how Eigen layer aims to achieve this, here’s a well detailed thread by the founder

Sreeram Kannan @sreeramkannan

EigenLayer - What is it good for? This is a thread that explains the underlying elements of trust in the @eigenlayer network and how they can be put together to create powerful services with customized decentralized trust models.

Also, there’s some kind of partnership with Rocket pool, which might be a bull case for $RPL.

This article below is the Shot.

https://mirror.xyz/jasperthefriendlyghost.eth/CvGJPdUZ7Fnnpa8DsEXtL-W4FxoBoublwsmN-Im0kfg

NFT Financialization

NFTFI is another hot narrative to keep an eye on, This sector is NFT based and this seems to bring back the NFT season a bit.

NFTFI is Simply DeFI applied to NFTs, thereby adding extra utilities for NFTs aside PFP usage.

Below is the Overview of the NFTFI Ecosystem

Updates on L2s and Protocols building on L2s

Cairo 1.0 is live

Cairo is the programming language for Starknet Ecosystem.

StarkWare @StarkWareLtd

Cairo 1.0 is here! Get your hands on the first taste of this Rust-inspired Cairo version and start writing today. And that's not all - stay tuned for more features and StarkNet compatibility coming soon. Try Cairo 1.0 now and read the full blog post! starkware.medium.com/cairo-1-0-is-h…

Optimism also made an update regarding its fund grant that will be live on 26th jan and don’t forget to keep an eye on this as it’s being speculated that those who donate for the public fund goods might be eligible for the second retroactive airdrop.