Research Summary
The report discusses three key trends in the crypto space: the potential approval of Bitcoin ETFs, the rise of LSDfi newcomers, and the emergence of Layer 2 solutions. It also touches on the debate around Ethereum staking and the risks associated with it. The report further highlights some recent developments in the DeFi space and provides a brief overview of Revelo Intel, a DeFi research tool.
Key Takeaways
Bitcoin ETFs
- Game changer for traditional investors: The approval of Bitcoin ETFs could make it easier for traditional investors to invest in Bitcoin without having to manage Crypto directly. This could potentially pave the way for more institutional money to flow into Crypto.
- Leading contenders: BlackRock, Fidelity Investments, and ARK Invest are among the leading contenders for getting their Bitcoin ETFs approved. Other players like Grayscale, WisdomTree, Valkyrie, and Galaxy/Invesco are also in the race.
- Potential for approval: The report suggests a strong chance that the Bitcoin ETF will be approved this year.
LSDfi Newcomers
- Financial innovations: LSDfi, a combination of LSD & finance, refers to financial innovations built on LSDs and ETH’s staking rate. An example is PENDLE, which has seen significant growth this year.
- LSD-backed Stablecoins: A new class of Stablecoins backed by LSDs is emerging, opening up a new category in the Stablecoin space.
- LSD indexes: LSD indexes allow for diversification among the top LSD protocols, spreading out risk.
Layer 2 Solutions
- Emergence of Layer 2s: After the popularity of Alt layer 1s in 2021, Layer 2 solutions are now emerging, featuring new technologies like ZK.
- FraxChain: FraxChain, a hybrid rollup built on Optimistic rollup architecture with zk-proofs integrated, is one of the Layer 2 solutions that caught the report’s attention.
Actionable Insights
- Monitor Bitcoin ETF developments: Keep an eye on the progress of Bitcoin ETFs as their approval could significantly impact the crypto market.
- Explore LSDfi and Layer 2 solutions: Consider investigating the potential of LSDfi newcomers and Layer 2 solutions as they represent innovative trends in the crypto space.
- Consider the risks of Ethereum staking: While Ethereum staking can offer additional yield, it also comes with risks that need to be carefully considered.
