Drop it like it’s hop – Bankless

Drop it like it’s hop – Bankless

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Dear Bankless Nation,

It was a turbulent week in crypto.

Let’s recap.

1. Fed crashes market

The Fed this raised interest rates by half a percentage point this week.

This is the largest rate hike in 20 years in response to the highest consumer inflation rates seen in the last 40 years.

US consumer prices rise at fastest pace since 2008 | Financial Times

But it doesn’t stop there.

Fed Chairman Jerome Powell indicated there are more rate rises, at least TWO more 50 basis point raises in the coming months.

While both equities and crypto initially responded well to the news, these reversed gains less than 24 hours later. The S&P 500 is down -14% on the year while BTC and ETH are down -47% and -44% since all-time highs in November.

Not the best time to be in risk-on assets.

The Fed has a difficult job ahead.

Powell must combat the highest-recorded inflation in recent history by raising rates, while staving off a recession.

Raise rates too quickly or too much and the economy can come crashing down.

We’re hoping for “a soft landing”

We’ll see how markets respond in the coming months.

2. Are they coming for DeFi?

PoolTogether, the no-loss lottery, is getting sued by a troll for $230M—2x the amount of value that’s actually locked in the protocol.

The plaintiff?

Senator Elizabeth Warren’s former technology lead. Not surprising given her campaign’s track record against crypto…

After depositing $10 into the protocol, Joseph Kent filed a lawsuit against PoolTogether for operating a lottery in New York, an illegal endeavor in the state.

Ummm…PoolTogether isn’t even a lottery.

PoolTogether is just a gamified crypto savings account. It helps people save money. There’s no mechanism to actually lose with PoolTogether (you can verify that on-chain!).

You deposit money and there’s a chance you win the interest earned from all the deposits. Moreover, your deposit is always redeemable 1:1 for the amount at any time.

This guy couldn’t have picked a nicer protocol to go after.

Instead of suing shady crypto scammers so rampant in crypto, this lawsuit attacks the kindest, most harmless app in DeFi. The thing that helps people save money…unlike the banks with their .01% interest rates.

The article states the plaintiff is “gravely concerned” about cryptocurrency and its “destructive” impact on the environment along with the ability to circumvent financial sanctions.

Is this just a frivolous lawsuit? A political attack? Uncertain.

Maybe the incumbents are scared and this is how they’re lashing out against DeFi.

3. Drop it like it’s hop

We’ve been predicting Layer 2 for a while and now we’re doubling down.

Simple reason why? The tokens are coming.

This week, there were three key developments in Layer 2 ecosystem:

  1. Hop Protocol token (get the details here)

  2. Optimism Stimpack—$230M OP project incentivization program

  3. ZkSync confirms its token after updating its FAQ

We unpack the whole Hop Protocol airdrop here—tune in to get all the details.

In terms of Optimism, this 230M allocation should be substantial. Even though we don’t have a dollar value for this allocation yet, we can do some basic napkin math using comparables.

At $1 OP, this would value the network at $4.2B FDV—less than half of Polygon—meaning the OP StimPak would be worth $230M. This allocation surpasses Avalanche’s similar $180M program, a key driver that propelled it to $8.2B in value locked.

Could the same happen for Optimism?

Bear market aside…one thing’s clear: L2 Summer is heating up.

Here’s what’s lined up for next week:

  • Jim O’Shaughnessy gives timeless wisdom for crypto investors (early release)

  • William shows us how to maximize ETH yield.

  • We’re going deep on meta-governance

Have a stellar weekend. We’ll see you next week.

– Bankless Team

P.S. We dropped our second Token Report with token ratings for BTRFLY, LDO, DYDX, PERP, and COMP. See where your project stacks up. Premium members only. 🏴

🙏 Sponsor: Polygon Studios—Fostering culture across Gaming, NFTs, and the Metaverse

Recap for the week of May 2nd, 2022

🎙️ WEEKLY PODCAST EPISODE

Listen to podcast episode | Apple | Spotify | YouTube | RSS Feed

ACTION RECAP 📚

READ 📚

  1. 📘 Crypto broke

  2. 📘 5 tips to spot the next big NFT

  3. 📘 Happy Birthday Bankless DAO 🥳

  4. 📘 The stablecoin wars

  5. 💬 Which crypto leaders have influenced you the most?

LISTEN 🔊

  1. 🎙️ Why Bankless is wrong | Ethan Buchman

  2. 🎙️ Ethereum’s eternal optimist | Karl Floersch

  3. 📺 Ethereum’s Hollywood moment | Camila Russo

  4. 📺 The trillion dollar L2 opportunity | Part One

  5. 📺 The trillion dollar L2 opportunity | Part Two

  6. 📺 Is crypto dead? | Fed crashes markets | BAYC Land Mint | Hop Airdrop

METAVERSAL 🧙‍♂️

  1. 📘 Hot and cold NFTs

  2. 📘 NFT lending

  3. 📘 Your NFT Edge

BANKLESS DAO 🏴

  1. 📘 Updating the DAO Operating System

  2. 📘 Where to buy, mint, swap, and sell your next NFT

  3. 📘 Unlocking the professional cheat code

OVERPRICED JPEGS 🖼️

  1. 📺 Paradigm shift in Hollywood

  2. 📺 Yuga Labs Otherside Land Sale Disaster

GREEN PILLED 🌳

  1. 📺 Solarpunk Girl Phoebe Tickell

Weekly Subscriber Perks 🔥

Bankless Premium Members get access to perks like these:

Launch your own raffle for Bankless Badge holders! Go ahead. We can’t stop you.

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State of the Nation: The Trillion Dollar L2 Opportunity

🎙️ PART 1

Listen to podcast episode | Apple | Spotify | YouTube | RSS Feed

🎙️ PART 2

Listen to podcast episode | Apple | Spotify | YouTube | RSS Feed

🗞️ Latest Weekly Rollup.

Listen to podcast episode | Apple | Spotify | YouTube | RSS Feed

Jobs opportunities 🧑‍💼

✨ See all listings on the Bankless Job Board

  1. Marketing Manager at Wanderverse Inc.

  2. VP of Engineering at ZKX

  3. Head of Growth at ZKX

  4. Lead Community Manager at CryptoSkulls DAO

  5. Senior Product Designer at Parcel Inc

  6. Ethereum Core Developer at Nethermind

  7. Golang Engineer at Nethermind

  8. Bankless Newsletter Editor (come join us!)

  9. Content Manager at Tally

  10. Director of Developer Relations at Valist

  11. Solidity Architect at Alluo

  12. Marketing Manager at Mesha

  13. UX Designer at Prometheus Research Lab

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🙏Thanks to our sponsor

Polygon Studios is on a mission to help build digital culture, play-to-earn gaming, NFTs, and the Metaverse ecosystem on Polygon. Some of the key projects supported by Polygon Studios include The Sandbox, Skyweaver, Big Time, Crypto Unicorns, and Decentraland—among others. Polygon Studios also helps fundraising & onboarding. Check it out here.

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Want to get featured on Bankless? Send your article to [email protected]

Write for Bankless

Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.

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