Wednesday, December 27, 2023

A Very Special Edition of The Node

Dec. 27, 2023

The biggest crypto news and ideas of the day

Were you forwarded this newsletter? Sign up here.

Don't want this newsletter? Unsubscribe

Welcome to a special edition of The Node! I'm Daniel Kuhn here to introduce a year-end series Consensus Magazine published making sense of the big themes, ideas and stories of the year, called Crypto 2024. Here's everything you need to know in the world of crypto law, culture and economics as we head into the new year!

Holiday notice: The Node will publish next on Jan. 3. Happy New Year, and thanks for reading!

Easy Choices

(Frederik Merten/Unsplash, modified by CoinDesk)

Like many people, NEAR Foundation CEO Illia Polosukhin thinks blockchains should run in the background. Doing so benefits average tech users who do not want to fumble around and guess which L1 network is best or get locked in layer 2 silos. More than just potentially speeding up adoption of crypto, easier-to-use blockchains might also end the long-simmering mentality of crypto "maximalism," where some people claim some particular chain is superior than the rest. In his essay, "The Rise of Chain Abstraction and End of Blockchain Factionalism," Polosukhin argues there are many hidden benefits of abstracting away the technical complexities of crypto.

Raising Asia

Longtime crypto marketer and consultant Amanda Cassatt sees the writing on the wall: with regulatory uncertainty and aggression at a recent peak in the U.S., more and more activity will transition to friendlier jurisdictions like Hong Kong, Singapore and the Middle East. Her company, Serotonin, for instance, recently opened an office in the APAC region. She is not alone. "This 'Asia speed,' as we at Serotonin affectionately term it, is a testament to the region's rapid adoption and contribution to Web3 technologies. I believe this dynamic will steer the upcoming bull market and introduce a geographical narrative to the crypto cycle," Cassatt writes.

Rebranding Blockchain

(freestocks/Unsplash, modified by CoinDesk)

Artist, designer and creative director Aapo Nikkanen is interested in Web3, but not its aesthetics. The industry is filled with jargon and layers of abstraction, which simply will not cut it if crypto is to reach the mainstream. While some think of "branding" as a dirty word, Nikkanen, who has worked with some of the world's largest luxury and fashion companies, thinks Web3 would benefit by "obsessing" over its image. "All technological revolutions have also always been cultural revolutions. The tech alone isn't enough: it's the means, not the ends," he writes, citing examples of Gutenberg's printing press, Steve Jobs' Macintosh and the Renaissance.

Skin in the Game

What airdrops are likely in 2024? Which bridge will be exploited? Will any crypto companies go public next year? More and more people are turning to prediction markets (crowdsourcing systems that allow people to bet on likely outcomes) as part of their information diets and sources of truth. CoinDesk editor Marc Hochstein gives a rundown of why interest in predictions markets, which can but do not always use blockchains, is blooming, after years existing mostly as an academic concept. He also looks at the most popular crypto-based betting markets, and the types of events people are putting money on.

Stabilizing Stablecoins?

(Unsplash)

For years stablecoins have dominated transaction volumes in crypto. These fiat-pegged assets are used from everything as payments options, trading pairs, risk hedges and quasi-bank accounts. This year has seen continuing growth in that direction (USDT, for instance, is at an all-time high market cap), as well as several mounting risks, including the de-pegging of the Circle-issued USD Coin and termination of the Binance-branded BUSD token. In fact, Moody's senior analyst Yiannis Giokas counted over 600 stablecoin de-pegging events in 2023. In a measured article, he goes through the drivers of stablecoin demand and potential risks likely to impact the sector in 2024.

Unleashing Lending

Crypto lending had a particularly brutal 2022 with the collapse of the largest centralized lending companies Celsius, BlockFi and Genesis as well as the event that kickstarted the contagion, the implosion of the interrelated decentralized lending protocol Anchor, algorithmic stablecoin UST and Terra blockchain. Ledn co-founder Mauricio Di Bartolomeo thinks this trauma may ultimately be good for the sector, as interest in crypto lending restarts amid rising crypto prices. He predicts, going forward, more institutional involvement and the potential release of a spot bitcoin ETF could lead to a more mature market.

A message from Phemex

Phemex: Blaze Crypto's Future Via Community-Building

Trust and security pose persistent challenges for crypto communities, with issues ranging from scams to asset security concerns. The decentralized nature of these communities makes it difficult to establish robust security measures and enforce the overall ecosystem's trustworthiness.

Even so, a principal tenet of cryptocurrencies has always been to provide users with greater autonomy. Continue reading.

Off-Chain Signals

12 Charts That Tell the Story of Crypto in 2023 – Unchained
Barry Silbert, Mark Murphy to exit Grayscale board – Blockworks
DeFi News There Was 60% Less "Free Money" From Token Airdrops in 2023 Versus a Year Earlier – The Defiant
Regulatory outlook: What will the SEC and CFTC be focused on in 2024? – The Block
Three new token projects ride $1bn EigenLayer hype – DL News
This N.Y.U. Student Owns a $6 Million Crypto Mine. His Secret Is Out. – NYTimes
Bitcoin and Crypto Stocks Had a Good 2023 – WSJ

TPS :: MPG, L2s :: ???

Consensus is the biggest and most established hub for everything crypto, blockchain and Web3. Join us at the 10th annual Consensus May 29-31 in Austin, Texas for dialogue, discovery and dealmaking alongside developers, investors, startups, executives and more.

Register with code NODE15 for 15% off. Grab your pass.