Words by Maven 11 Venture

The year kicked off with the launch of the first spot Bitcoin ETF, leading to significant Blackrock inflows and a bustling Ethereum ecosystem anticipating the Dencun upgrade. We're witnessing robust growth in Solana, innovative governance through Uniswap's revenue sharing, and integration of traditional web domains with blockchain via GoDaddy and ENS. Our portfolio companies, Renzo and Swell, are spearheading the liquid restaking narrative, demonstrating remarkable growth. This edition covers these key milestones and partnerships, highlighting the dynamic evolution of the crypto landscape and its expanding influence.

The unprecedented success of the first spot Bitcoin ETF

Having started the year off with the historic and first ever spot Bitcoin ETF, the inflows have been strong throughout February. Better yet, inflows and volumes have increased with no signs of slowing down. Thus far, Blackrock appears to be the big winner amongst all the issuers with a remarkable total inflow of more than 161 thousand Bitcoin. The total inflow of all the issuers combined is 336 thousand Bitcoin since the start on the 10th of January. Blackrock alone is pushing almost 48% of the spot Bitcoin ETF volume. Against the Total GBTC outflows of 189 thousand Bitcoin, the net inflow has far outweighed the outflow by an impressive 147 thousand Bitcoin. Institutional inflow has been speculated on ever since the spot Bitcoin ETF applications first got filed, and we are now seeing the effects in action.

Fundamentally, another milestone for the space is nearing completion, namely the highly anticipated Dencun upgrade for Ethereum. Last month this upgrade went live on the Goerli and Sepolia testnets and this month it was successfully launched on the last remaining testnet, Holesky. Principally, the Dencun upgrade introduces Proto-Danksharding (EIP-4844) and introduces a new transaction mechanism meant to reduce fees paid by rollups for Ethereum block space. The final mainnet upgrade is set for March 13th. When Dencun is successfully implemented, the next step for Ethereum will be to launch the “Verge” upgrade.

In terms of adoption, participants seem to become increasingly familiar with web3 and the various crypto ecosystems at their disposal. Solana has been a booming ecosystem over the past few months mainly due to the launch of the Jupiter exchange, the Jitto liquid staking token, a sudden surge in Solana meme-coin activity and even DEX volume surpassing that of Ethereum for a short while. Moreover, this month the number of new addresses on Solana soared to a new high of 12 million. Aside from the positive, February has also shown we are still early in terms of reliability of infrastructure as both the Solana network and Avalanche network experienced outages, meaning a temporary halt in block production leading to users not being able to use the network.

Uniswap's strategic shift: Revenue sharing and protocol enhancements

Another interesting development this month was the Uniswap revenue sharing proposal, which was speculated to arrive ever since its inception in Q3 2020. The proposal suggests distributing protocol fees to UNI token holders who stake and delegate their tokens, a move aimed at enhancing governance and incentivizing long-term holding. This is interesting because it potentially increases UNI token value and alters the protocol's economic dynamics Beyond that, the decentralized exchange announced a sidebar wallet extension, limit orders, token detail pages, ENS subdomains, and they even teased their upcoming version 4 of the protocol coming in Q3.

Bridging Web2 and Web3: The GoDaddy and ENS collaboration

Web2 domain name registry GoDaddy reached an agreement with ENS (the Ethereum Name Service). This collaboration facilitates the ability for users to link their internet domains to their ENS addresses for free. This deal signals interest in connecting blockchain with traditional technologies. GoDaddy stated one of their next initiatives will be to integrate more chains beyond Ethereum. GoDaddy is the fifth largest web host by market share, and collaboration with web3 technologies is an important signal of web3 acceptance and adoption.

Renzo and Swell are two of our portfolio companies that are deeply rooted in the recently new liquid restaking narrative on EigenLayer. As of this month, Renzo multiplied their TVL by more than four times to a current $680 million. Swell is also gaining outstanding traction and currently sits at a TVL of $117 million. As the restaking narrative continues to grow, Renzo and Swell are at the forefront of it all. Furthermore, NPTPerp announced the V2 of their upgraded perpetual futures model for NFTs. The upgrade offers a fusion AMM, in-house oracle for NFT valuations and an enhanced insurance fund. In the last week of this month alone, V2 did over $14 million in volume. They will also be doing another incentive program for early users.

The modular ecosystem is consistently expanding and remains to be the single most popular narrative in crypto, with Celestia as the foundational pillars. To start the month off, Starknet partnered with Celestia, enabling all Starknet Layer 3 chains to be incepted with a Celestia integration for data availability and thus reduced gas costs. Also, Stride launched stTIA, a liquid staked token for Celestia. Stride is offering significant incentives to bootstrap the token and already has a TVL of $57 million. With MilkyWay also in the LST race sitting at a TVL of $42 million, the competition is growing. Another major development is the mainnet launch of Dymension, a protocol where users can seamlessly spin up modular RollApps with an embedded Celestia DA integration. Dymension also announced the launch of their modular liquidity layer which is basically a settlement layer for RollApps with an AMM. Dymension stormed the gates with almost 850 thousand new addresses in the first three weeks. Lastly, the Syndicate Frame Chain with Farcaster also partnered with Celestia to leverage their DA layer. This integration removes several limitations of block space and high gas costs, fostering greater growth and creativity in the Farcaster/Frames community.