Health, Wealth, and Happiness

March 20, 2024

“Time is free, but it’s priceless. You can’t own it, but you can use it. You can’t keep it, but you can spend it. Once you’ve lost it you can never get it back.”

- Harvey Mackay

Howdy, investors!

Our new Yield Farming Sector Report lists our top strategies for investing in this growing sector.

Ethereum's Dencun upgrade has increased the efficiency of the network, akin to the way buses improve the efficiency of highways. More on this great analogy below.

DePIN, or Decentralized Physical Infrastructure Networks, are expected to be huge beneficiaries of the AI revolution. With revenue that comes from real utility, these DePIN projects should be on your radar.

Fidelity has joined other funds in adding staking to its spot Ether ETF application. But will the SEC approve these new Ethereum ETFs?

Read on!

Sector Report: Yield Farming

by Preetam Kaushik

Yield farming, or liquidity mining, is an investment strategy in decentralized finance (DeFi) that involves providing liquidity to DeFi platforms in exchange for rewards, typically in the form of the platform's native tokens. Yield farming is like earning interest on your crypto.

Just as keeping your dollars in a savings account provides banks the capital to make loans, storing your crypto in yield-bearing “accounts” provides DeFi platforms the capital to run their “businesses” (as well as a host of other benefits).

Yield farming attracts capital to fuel the growth and expansion of the DeFi ecosystem, and creates network effects that increase the demand for platform tokens, elevating their value. So, a second way of investing in yield farming is buying and holding the tokens of top yield-farming platforms.

As you’ll see in our updated yield farming sector report, yield farming offers the potential for high returns, keeps the DeFi sector dynamic and competitive, fosters constant innovation, and attracts even more participants to the ecosystem.

See our top Yield Farming investing opportunities >>

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Blockchain Book Club: Read Write Own by Chris Dixon

Join us TONIGHT -- Wednesday, March 20, at 6:30 PM ET -- to discuss Read Write Own, Chris Dixon's exciting new book.

If you've followed a16z crypto's Chris Dixon, you know he's among the industry's smartest and most thoughtful voices. Join us to discuss his new book, Read Write Own, where you'll learn:

Why blockchains aren't databases, they're a new type of computer;
His amazing chapter on tokenomics, including principles around "faucets" and "sinks";
How to value crypto investments using fundamentals (and why to avoid memecoins).

These online book club events are friendly and informal, and everyone is welcome to discuss and learn, whether or not you've read the book (we'll hit the key points for you).

Premium members: Register to attend online and reserve your spot.

Not yet a Premium member? Sign up here and join the discussion!

Must Read

Today's most important stories for crypto investors.

Upgrade to the Future (a16zcrypto)

The recent Dencun upgrade to Ethereum added "blobs" to blocks, providing temporary storage for roll-up data and reducing the network's dependence on permanent data storage. We've written about Dencun, but it bears repeating that implications for Ethereum investors are significant, as lower transaction costs will likely lead to more users, and more network value.

DePIN: Crypto Meets AI Real-World Use Cases (Crypto Pragmatist)

DePIN (Decentralized Physical Infrastructure Networks), which focuses on the technology supporting AI tokens, is an industry to watch. Messari's 2023 report predicts DePIN could reach a market value of $3.5T by 2028, transforming infrastructure development with blockchain technology. It's worth noting that DePIN's revenue comes from the actual utility, making these projects good targets for those investing in fundamentals (as we do).

Fidelity Adds Staking To Spot Ethereum ETF Application (The Defiant)

Fidelity has updated its spot Ethereum ETF application to include plans for staking a portion of the fund's Ether through a third-party staking provider. However, analysts are increasingly skeptical about the SEC's approval of these spot Ether ETFs. An approval would have enormous implications for Ethereum investors, as shown by the recent approval of bitcoin ETFs (and subsequent BTC price explosion).

Chart of the Day

Ethereum L2 transaction counts are growing

In the week since the Dencun upgrade to Ethereum, DeFi is far cheaper, with average fees falling from 50%-90% on popular Layer-2 protocols and bridges. This is great news for users and developers, but not so great for the L2s that derive their revenue streams from the fees on Ethereum.

Fortunately, as we can see from the chart above, transaction volume on L2s is growing. If the trend continues, L2s will soon be not only back to prior revenue levels, but much higher.

As lower fees attract more developers building dApps -- and those dApps attract more users -- revenues are likely to rebound. If this happens, then L2s tokens could grow in value, and investors may want to consider which L2 tokens might fit into their portfolios.

ICYMI