chandanCrypto Applications Product Market Fit Analysis
In Crypto, there are a lot of applications that haven’t found product-market fit. But there is also a handful of applications that have a product market fit and are growing stably Here I will just explain my thoughts on which applications have Product-Market-Fit. Storage of Value (an asset that maintains or increases its value rather than depreciating)Bitcoin is the dominant product-market fit for this, followed by ETH. However, BTC has questionable long-term sustainability properties. Thanks...
chandanHow to Protect Your Crypto Wallet 95% of the Time
Always keep your private key and seed phrase offline, such as by writing them down on paper and storing them in a secure location that only you have access to. Do not save them on any device or cloud storage, as these can potentially be hacked and your wallet compromised.To further increase security, you can consider leaving out a few words from your seed phrase when writing it down, and memorizing or securely storing these words separately. This way, even if someone gets hold of the paper wi...
chandanAre Layer 2s Superior to Alt-1 for Scaling Capabilities?
Traditional monolithic execution layers rely on 1000s of block producers and non-producing full nodes, requiring a majority of them to act honestly. In contrast, layer 2s only require a single honest "Sequencer" to guarantee network integrity. This asymmetric trade-off suggests that layer 2s will consistently deliver high throughput and significant performance advantages, even when the same hardware is employed by both layer 1 and layer 2. This is due to the inefficiencies of synchronization ...
Researching Layer 1/2s, DeFi, and modular ecosystems.
chandanCrypto Applications Product Market Fit Analysis
In Crypto, there are a lot of applications that haven’t found product-market fit. But there is also a handful of applications that have a product market fit and are growing stably Here I will just explain my thoughts on which applications have Product-Market-Fit. Storage of Value (an asset that maintains or increases its value rather than depreciating)Bitcoin is the dominant product-market fit for this, followed by ETH. However, BTC has questionable long-term sustainability properties. Thanks...
chandanHow to Protect Your Crypto Wallet 95% of the Time
Always keep your private key and seed phrase offline, such as by writing them down on paper and storing them in a secure location that only you have access to. Do not save them on any device or cloud storage, as these can potentially be hacked and your wallet compromised.To further increase security, you can consider leaving out a few words from your seed phrase when writing it down, and memorizing or securely storing these words separately. This way, even if someone gets hold of the paper wi...
chandanAre Layer 2s Superior to Alt-1 for Scaling Capabilities?
Traditional monolithic execution layers rely on 1000s of block producers and non-producing full nodes, requiring a majority of them to act honestly. In contrast, layer 2s only require a single honest "Sequencer" to guarantee network integrity. This asymmetric trade-off suggests that layer 2s will consistently deliver high throughput and significant performance advantages, even when the same hardware is employed by both layer 1 and layer 2. This is due to the inefficiencies of synchronization ...
Researching Layer 1/2s, DeFi, and modular ecosystems.
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EIP-4844 is now live, introducing 'Proto-Danksharding,' enabling blob transactions for rollups.
With blob txs, rollups will have their own fee market and therefore won't have to compete with mainnet apps. As a result, posting rollup data is much cheaper and fees on rollups are decreased by orders of magnitude.
Gas Fee Reductions:
Zora: 0.54 -> 0.001
Base: 0.59 -> 0.003
Starknet: 0.96 -> 0.025
OP Mainnet: 0.53 -> 0.007
But what are the implications for Ethereum's profitability?
Despite the reduction in fees paid by rollups to Ethereum Mainnet, Ethereum's fee generation is unlikely to plummet.
Because, Rollup settlement fees accounted for only ~7-10% of Ethereum's total fees in February, amounting to $33m out of $355m.
Major Contributors to Ethereum Fees: Uniswap V3 routers, ETH transfers, Tether transfers, 0x, Banana Gun, MetaMask, and Maestro are significant contributors.
Short-term, EIP-4844 may lead to a loss of $30m in monthly fees, but this is not detrimental to Ethereum's deflationary nature.
Long-Term Impact:
In the long run, EIP-4844 is beneficial as reduced rollup fees unlock diverse use cases such as gaming, AI, NFTs, high-performance order-book DEXs, Depin, and social apps.
With Eth as the gas fee token in most rollups, the value-driven to Ethereum exceeds the monthly fee reduction.
User Growth on Layer2s:
There are currently an average of 12m monthly active users on Layer2s, predominantly holding Ethereum to pay for gas fees. As more users join this layer2s they only increase the demand for ETH as it is the gas fee token.
The total ETH bridged to Layer2s stands at 26B and continues to grow steadily.
Conclusion:
While there may be a short-term negative impact on Ethereum's fee generation, long-term benefits are substantial.
ETH becomes the settlement asset across various rollups and Appchains, reinforcing its value proposition.
Thanks for reading and Let’s connect on X
EIP-4844 is now live, introducing 'Proto-Danksharding,' enabling blob transactions for rollups.
With blob txs, rollups will have their own fee market and therefore won't have to compete with mainnet apps. As a result, posting rollup data is much cheaper and fees on rollups are decreased by orders of magnitude.
Gas Fee Reductions:
Zora: 0.54 -> 0.001
Base: 0.59 -> 0.003
Starknet: 0.96 -> 0.025
OP Mainnet: 0.53 -> 0.007
But what are the implications for Ethereum's profitability?
Despite the reduction in fees paid by rollups to Ethereum Mainnet, Ethereum's fee generation is unlikely to plummet.
Because, Rollup settlement fees accounted for only ~7-10% of Ethereum's total fees in February, amounting to $33m out of $355m.
Major Contributors to Ethereum Fees: Uniswap V3 routers, ETH transfers, Tether transfers, 0x, Banana Gun, MetaMask, and Maestro are significant contributors.
Short-term, EIP-4844 may lead to a loss of $30m in monthly fees, but this is not detrimental to Ethereum's deflationary nature.
Long-Term Impact:
In the long run, EIP-4844 is beneficial as reduced rollup fees unlock diverse use cases such as gaming, AI, NFTs, high-performance order-book DEXs, Depin, and social apps.
With Eth as the gas fee token in most rollups, the value-driven to Ethereum exceeds the monthly fee reduction.
User Growth on Layer2s:
There are currently an average of 12m monthly active users on Layer2s, predominantly holding Ethereum to pay for gas fees. As more users join this layer2s they only increase the demand for ETH as it is the gas fee token.
The total ETH bridged to Layer2s stands at 26B and continues to grow steadily.
Conclusion:
While there may be a short-term negative impact on Ethereum's fee generation, long-term benefits are substantial.
ETH becomes the settlement asset across various rollups and Appchains, reinforcing its value proposition.
Thanks for reading and Let’s connect on X
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