Solana’s New Trading Innovation, Coinbase’s Delinquent Validators & More

Welcome back!

This is J264G and this week I’ve got these titbits for you:

• Trading Innovation: Starport, a new DeFi protocol, releases its litepaper.

• Decentralisation Concerns: Coinbase validators frequently delinquent.

• Capital Efficiency: Orca highlights capital efficiency of Solana DeFi.

According to Toly, everyone is stuck with Windows 95, while Solana has its Windows 2000 moment.

Having said that, Windows 2000 … sorry, Solana has been on a tear recently.

Why is that the case? Well ⬇️

Let's get this show on the road!

Click on any underlined heading/hyperlink to learn more.

Spotlight

Levelling The Playing Field

When I browse through X, I sometimes get the feeling that we can't agree on much.

There's one thing, however, we all seem to accept: Stablecoins are the crypto use case with the strongest product-market fit.

To understand why, you only need to spend 2:30mins and watch Circle's newest clip.

As Circle put it: Crypto in general, and USDC in particular, enables a low barrier access to financial systems — allowing people across the world to participate in the global economy. This is particularly beneficial for unbanked and underbanked people, as well as regions with hyperinflation. As such, crypto can level the economic playing field, from Miami to Melbourne, from Copenhagen to Cape Town.

Granted, we all know this and it comes as no surprise to us — as we're all part of the same echo chamber. But as soon as you zoom out, you'll realise that the general public has no idea as to why crypto is important.

That's why the role of crypto media cannot be overstated.

Crypto media, such as Blockworks, Decrypt/Rug Radio, The Sleuth (😏) and many more, decipher the complexities, narratives, and opportunities that define the general blockchain landscape — more timely, nuanced, and comprehensive than any traditional media outlet.

By doing so, crypto media plays a pivotal role in shaping perceptions, influencing investment strategies, and fostering dialogue within the crypto community. 

Outside the crypto industry, crypto media serves as a catalyst for education and awareness. By doing so, the general public can attain the knowledge required to navigate the complexities of digital assets and blockchain technology, and embark on a journey of economic self sovereignty.

As such, crypto media doesn’t only function as a conduit between different L1 and L2 ecosystems, but between the crypto industry and broader society as well.

This is the reason why we've seen crypto media increasingly grow in relevance lately, underpinned by recent fundraises, mergers, and acquisitions.

So, what is The Sleuth doing to level the playing field?

As mentioned last week, we’ve completed phase 1 of our growth strategy.

• Phase 1: Doing things that don't scale — as per Paul Graham. As outlined last week, the lion share of our community was manually invited in order to create a curated and bespoke core readership to validate our vision.

• Phase 2: The playbook for building a big company — as per Vibhu Norby.

Bearing in mind Vibhu’s framework above, let’s see what The Sleuth has achieved so far:

• Build a bare minimum feature set that does something fundamentally new that people really want: Done ✅ 

• Find distribution channels at all costs: Done ✅ 

• Bring that cost down over time at the same rate that your product improves: Pending ⏳

Just recently, we set up the first paid user acquisition campaign for The Sleuth.

Currently, our acquisition cost per subscriber and our overall customer acquisition cost (CAC) are low — which is good. Having said that, these will increase as we start targeting more relevant and high-quality audiences.

Essentially, we're following a trajectory similar to Coinbase. According to the exchange’s annual report for 2022, sales and marketing costs (incl. CAC) increased from 4% of total revenue in 2020 to 16% of total revenue in 2022 — attention in crypto is getting increasingly expensive.

Thus, we’re cognisant of the fact that the spend of The Sleuth's newly launched user acquisition campaign will first increase, before we’re able to bring it down as per Vibhu’s last point.

In this context, The Sleuth now has 4 moats in play with a clear path to scale:

1. A large Solana-centric network incl. personal connections

2. An unrivalled core readership incl. builders, journalists, KOLs & VCs

3. One of the largest Solana content archives (non-PR/non-documentation)

4. A unique user acquisition campaign incl. a transparent cost structure

Scaling The Sleuth is pivotal. 

That’s because at the end of the day, it's not only about bringing the fastest and cheapest USD to institutions (Visa and Shopify) and individuals via USDC.

It's also about broadening the adoption of other Solana use cases such as payments (TipLink, DeCaf, and Sling) and decentralised physical infrastructure networks (io.net, Render Network, and Helium). 

OPOS 🫡

Charts Of The Week

VC & Angel Onboarding

If you're a VC or angel investor who’s new to Solana or seeking to deepen your understanding of the ecosystem — my DMs are open! I'd love to help you get onboarded so that you too can start building out a more robust Solana investment thesis and strategy.

News Bites

Payments Infrastructure: Sphere is intensifying the rollout of its crypto-centric payments infrastructure. Exciter features: Seamless off-ramping and robust accounting processes.

Capital Efficiency: By now you’ve heard about the much touted capital efficiency of Solana’s DeFi protocols. But how about this eye-popping example: Orca's SOL/USDC pools generated ~$100M and $26M in 24h volume with only $5.6M and $280K in liquidity, respectively. 

Uniswap Rivalry: In previous newsletters, we’ve highlighted Jupiter’s increasing volume and growing competition with Uniswap. Now, the liquidity aggregator has outpaced Uniswap v3 on Arbitrum and has its eyes firmly set on Uniswap v3 on Ethereum. 

Delinquent Validators: According to Laine, Coinbase validators seem to have frequent and extended delinquencies recently. Obviously, this isn't a CEX-specific problem, but highlights that it might be worthwhile to stake with a high performing independent validator as well — particularly when bearing in mind “not your keys, not your crypto”.

Trading Innovation: Starport (prev. Alexandria) has released its litepaper in which it gives a deep dive into its multi-asset limit order station.

Caught In 4K

Weekly Take

Keks & Giggles

And that's a wrap!

If you'd like to reach me, respond to this newsletter or reach out to me on X.

Talk soon!

J264G

_{DISCLAIMER
None of this is financial 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. Please be careful and do your own research. Lastly, please be advised that we discuss products and services from our partners from which our team members may hold tokens/equity.}