Onchain: A W, an L, and something in between

But as they say, one should always deliver the bad news first, so here we go.

Story One

Wormhole’s W airdrop more of an L?

If there were an Oscar for giving free money to the wrong people, Wormhole would be a top nominee.

As a protocol in the back, Wormhole connects multiple blockchains, including Ethereum, BNB chain, Solana, Polygon, and Oasis – enabling token and NFT bridges, cross-chain oracles, and other messaging apps.

Until recently, Wormhole was best known as a top DeFi hack with a $320 million exploit of its flagship product. Nomen et omen. If your product is called something-hole, maybe it’s expected to become a sinkhole for liquidity.

However, with their airdrop announcement, the team has moved beyond that, offering 6% of the W token supply to 400,000 wallets. To ensure Degens could check their future bags in advance, Wormhole released an eligibility checker, which didn’t quite satisfy community members.

It turns out that some users who grinded relentlessly and bridged significant amounts using Wormhole tech stood to receive very little, while people who just bought the right NFT got a lot.

Takeaway: Way to waste your airdrop budget. But maybe they are just having a nihilistic phase, and this is a bold move to showcase the absurdity of crypto. If so, more power to them.

Story Two

Is SocialFI over?

That’s the verdict of CT and media publications like Cointelegraph. SocialFi, the combination of Social Media with financialization, was hyped as the best thing since sliced bread until we all realized that dumping your friends’ keys is not a great way to maintain friendship.

Despite the launch of a points program, Friendtech has been struggling to maintain more than 3k transactions per day. Similarly, Farcaster has seen user numbers drop off since its user ATH of 40,000, driven by a flurry of activity surrounding frames. Even adding support for transactions in-frame and Solana wallets to the mix hasn’t stopped what appears to be an exodus.

The only one seemingly bucking the trend is Lens Protocol, which went permissionless on February 27th and has since witnessed an influx in new users and a revenue growth from profile minting to over $500,000. It might have helped that early Lens users woke up to an airdrop.

Takeaway: While it seems that putting a price on your friends isn’t a great market, community could be. A sticky user base continues to be active on these platforms. So far, Farcaster has been the only place where I found people willing to sing Karaoke at 10 am on a Saturday during a crypto conference. Maybe the real treasures is the frens we make, and that’s kenough 🎤

tenor

Story Three

Ethena printing money

The best news, aside from Bitcoin hitting numbers, is that a crypto protocol is actually making revenue. Considering the lack of profitable business models in crypto, you’re forgiven for believing this isn’t an industry with sound business acumen. Protocols pay millions to validators to serve queries worth, at best, 10s of thousands.

Not so Ethena. In just weeks since launch, the DeFi bond has become the highest-earning dApp after hitting over $6.8 million in daily cumulative rewards. The only blockchain stacking higher returns is Tron, with $38.6 million. And that’s largely thanks to Justin Sun staking his retirement funds and millions of people in developing countries who use USDT on Tron as an easy, cheap, and fast on- and off-ramp to the dollar economy.

The secret behind Ethena’s success is simple: high yields. Ethena bundles staked ETH and derivatives and uses them as backing for its synthetic dollar.

Whoever holds this dollar benefits from staking rewards and other income. Currently, yields are at a reasonable 67.2%.

Takeaway: At least all of the backings is onchain, and you can see what’s really behind your synthetic dollars. Nevertheless, it never hurts to be cautious about things we do not fully understand.

Fact of the week: Since everyone seems to have seen Dune 2 on my timeline, and we talked about worms (holes), here’s a fact about Sandworms that you can’t learn from the movie. They are like engines inside, emitting hellishly hot breath that smells like cinnamon. Next time you walk in the desert and smell cinnamon, be warned.

Naomi for CoinJar

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