Research Summary
The report discusses the current state of the US national debt, Circle’s decision to “de-risk” USDC’s collateral out of treasuries and into overnight repo agreements, and the launch of the liquid staking protocol Rocketpool on zkSync Era. It also highlights the potential risks and benefits of transacting and swapping tokens on a Layer-2 rollup versus Layer-1 Ethereum, such as faster processing speeds and lower costs. However, it warns of the risks for hacks and bugs, as well as the reality of high degrees of centralization, that exist on rollups due to their novelty.
Actionable Insights
- Monitor the progress of Ethereum’s scalability roadmap: Keep a close eye on forthcoming upgrades to rollups as there are likely to be many in the months and years ahead.
- Consider the benefits and risks of Layer-2 rollups: Faster processing speeds and lower costs are potential benefits, but be aware of the risks for hacks and bugs, as well as the reality of high degrees of centralization.
- Understand the implications of US national debt: Owning bitcoin provides protection against the bail-ins and wealth confiscations that typically accompany defaults and serious systemic and banking crises.
- Stay updated on the developments of liquid staking protocols: The launch of liquid staking protocols, as well as other types of dapps, to Layer-2 rollups is needed to battle test the technology.
