Solana Restaking Takes Off, First RWA Fund Launches On Solana & More

Welcome back!

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

• Solana Restaking: Jito releases code for Solana restaking. 

• RWA Evolution: Hamilton Lane launches RWA fund on Solana. 

• On-Chain Identity: The Republic of Palau to soon introduce IDs on Solana.

The spot ETH ETFs in the US went live successfully — a massive achievement for all of crypto! 

We all know what that means ⬇️

While we wait, we continue to do what we do best: build.

Now, let’s jump right into this week’s newsletter!

Click on any underlined heading/hyperlink to learn more.

Spotlight

Avoiding Kingmakers

The launch of spot BTC and ETH ETFs in the US marks a significant milestone, opening doors for more traditional institutional and retail investors to gain exposure to digital assets. 

While this development lends credibility to the crypto ecosystem and lowers entry barriers, it also introduces notable risks.

A primary concern is the potential centralisation of asset control. If ETF providers amass substantial holdings of BTC and ETH, they could wield significant influence over the underlying networks, potentially creating a single point of failure. Also, this raises questions about the impact on DeFi protocols and the broader decentralisation ethos of the crypto space. Another risk involves market dynamics and price stability. While ETFs can enhance liquidity and price discovery, their size and influence could lead to increased volatility. For example, ETF providers might prioritise short-term profits, potentially creating price bubbles and market instability.

To mitigate these risks, it's crucial to promote a wider distribution of crypto assets, particularly in light of growing institutional interest. In this context, we should advocate for regulations allowing institutions to directly custody crypto assets. 

This offers several advantages:

1. Asset Control: Direct custody empowers institutions with full control of their digital assets, reducing the risks of centralisation and market dominance often associated with ETFs.

2. Enhanced Security: By managing their digital assets, institutions can implement tailored security measures, avoiding the concentrated risk posed by centralised custodians such as Coinbase, which currently safeguards most spot ETH ETFs.

3. Increased Flexibility: Direct custody also preserves the 24/7 trading capabilities of cryptocurrencies, allowing institutions to react quickly to market changes, unlike ETFs with limited trading hours.

4. Deeper Engagement: Institutions that directly custody crypto assets can gain a more profound understanding of blockchain technology, potentially driving innovation and better integration of these solutions into their existing operations.

While the launch of spot BTC and ETH ETFs is cause for celebration, we must remain vigilant about their growing market influence and kingmaker potential for DeFi. Simultaneously, we should push for regulation allowing institutions to custody cryptocurrencies directly. 

This balanced approach supports the strategic goals of most stakeholders and contributes to a sustainable and resilient growth of the broader crypto ecosystem — our very goal after all!

Chart Of The Week

News Bites

Solana Restaking: Jito has released code for restaking on Solana. Jito Restaking is currently undergoing auditing and formal verification, and the source code can be reviewed here.

RWA Evolution: Private markets investment management firm, Hamilton Lane, becomes the first institution to launch a fund (SCOPE) on Solana — powered by Libre.

Enhanced AMM: Ellipsis Labs has unveiled a new design for a sandwich-resistant AMM. If successfully implemented, it could represent a substantial enhancement over existing AMM models on Solana and decrease the incidence of sandwiching by over 95%.

On-Chain Identity: The Republic of Palau is planning to implement a digital identification system built on Solana. This initiative aims to empower citizens with greater control over their personal identities while facilitating swift and secure verification processes.

Chapter 2: Blockworks estimates that Solana Mobile can sell 1-10 million devices over the coming years. The next device, Chapter 2, can currently be pre-ordered here.

Stablecoin Expansion: Lulo is now part of the Circle Alliance Program, a global network for stablecoin innovation working on expanding financial inclusion for people around the world.

Radar Hackathon: The next Solana hackathon, Radar, is around the corner. The event will take place September 2–October 8 and you can register here.

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.}