Today’s article contains the following:
Major cryptocurrency drivers in April
This week’s on-chain Alpha
The latest developments in DeFi
Major cryptocurrency drivers in April
April is going to be a big month for cryptocurrencies.
The much-anticipated Bitcoin halving is about to take place.
Not only that, but there are several high-profile projects that are about to release their tokens or undergo major upgrades.
Here are four important cryptocurrency events to watch over the next month:
1. Bitcoin Halving
The next Bitcoin halving is expected to occur in approximately 22 days.
Once effective, it will reduce the number of new bitcoins in circulation by 50%.
However, it is worth noting that the current inflation rate of Bitcoin is already very low (less than 2% per year).
So from a fundamental point of view, I think the halving is not a big deal. But from a psychological point of view, it is not the case.
Many people know that Bitcoin has historically performed very well in the months following each halving event, so they are likely to quickly buy crypto assets again, expecting history to repeat itself.
In addition, the Hong Kong Securities and Futures Commission is expected to approve the first spot Bitcoin ETF in Hong Kong in the second quarter.
All these events paved the way for Bitcoin.
2. Stacks Nakamoto Upgrade
Stacks is a second-layer Bitcoin solution that makes smart contracts and dApps more powerful.
Stacks’ Nakamoto upgrade has been in development for a long time and looks set to finally begin rolling out on mainnet next month.
The Nakamoto upgrade will:
Allows the use of sBTC (an asset pegged to BTC) in DeFi on Stacks
Reduce network block time from 10 minutes to seconds
Increase the scalability of Stack L2
This upgrade may trigger a new round of Bitcoin L2 enthusiasm.
Stacks token$STX can also be considered a beta version of Bitcoin.
Stacks is by far the most popular project built on top of Bitcoin.
3. Solana Airdrop Season
Last year, the massive airdrop announced by Jito revived the Solana ecosystem. In April, several other well-known Solana dApps will launch tokens:
· Kamino
All of these protocols will be doing airdrops.
This list only includes airdrops that have been officially confirmed, so there may actually be some that have not been announced.
Large airdrops can have a hugely positive impact on an ecosystem because they inject more liquidity into it. For example, here’s what happened after $JTO was announced in November 2023:
Considering that SOL's market cap is now over $80 billion, I think it's unrealistic to expect SOL to grow 2-3 times again in the short term.
However, Solana will likely benefit greatly from these ecosystem airdrops, as it has in the past.
4. Eigenlayer mainnet launch + potential token launch
The Eigenlayer token is likely to be launched in late April or early May.
There are multiple reasons for this:
Eigenlayer mainnet is confirmed to be launched in the next few weeks (this may be the best time for Eigenlayer to also launch a token)
Many early investors said the token will be released in late April or early May
Additionally, April may also be the month when the first Eigenlayer Active Verification Service (AVS) goes live. A popular example of AVS is Altlayer, a decentralized protocol for Rollups.
The protocol that chooses to "rent" security from Ethereum through Eigenlayer is called AVS (can be an oracle, sidechain, L2, etc.)
Many of these AVS projects will likely conduct airdrops for Eigenlayer users, just as Altlayer did when it launched its token a few months ago.
According to the Etherfi team, 8 AVS will soon begin distributing points or token rewards to EtherFi’s eETH liquidity re-staking token holders.
On-chain Alpha
$86 billion of institutional funds flowed into Bitcoin in the past 6 months
As shown in the above chart, institutional inflows into Bitcoin have increased dramatically since the launch of the spot Bitcoin ETF.
This got me thinking about what would happen to Ethereum’s institutional adoption if a spot Ethereum ETF was also approved later this year.
It is becoming increasingly clear that institutions are beginning to realize that cryptocurrencies are indispensable.
The latest progress of DeFi
CTFC reaffirms that ETH is a commodity, increasing the likelihood of approving a spot Ethereum ETF
· Ethena announced that the $ENA token will launch on April 2. 5% of the $ENA supply will be airdropped to early adopters
· Optimism allocated $3 billion in grants across the Optimism Collective & Superchain.
NEAR Protocol launched Chain Signatures, which enables NEAR accounts to sign transactions for any blockchain. The goal is to improve the cross-chain user experience
Circle released its cross-chain transfer protocol on Solana. Now, USDC holders can transfer USDC on 8 chains with 1:1 capital efficiency
Zero1 launched Keymaker, a decentralized AI-related marketplace. Keymaker aims to become the largest decentralized AI ecosystem
Ankr launches Neura, a blockchain built for artificial intelligence. Neura will leverage Bitcoin’s security through Babylon to secure its network
Polygon launched dApp Launchpad, a portal for developers to enter the Polygon ecosystem. The goal of dApp Launchpad is to improve the Polygon developer experience.
Angle Protocol launches USDA, a yield-bearing USD stablecoin backed by RWA. USDA will have several anti-decoupling mechanisms and have the same liquidity as USDC
PancakeSwap announced the launch of MancakeSwap, PancakeSwap’s first Mantle network-affiliated DEX. Mancake will pay 60% of its revenue to Pancakeswap
Liquity demonstrated the key feature of Liquity V2, user-set interest rates, designed to create an efficient market between borrowers and stablecoin holders
EtherFi released Points Season 2. The second quarter allocation is 5% of the total ETHFI supply and will end on June 30th
Munchables, a popular protocol on Blast L2, suffered a $63 million hack. Fortunately, the hacker has returned the funds
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