Customisable LSTs On Solana, Solana Expands To The Middle East & More

Welcome back!

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

• Custom LSTs: Sanctum is rolling out “validator LSTs”, bolstering Solana DeFi. 

• Proactive Security: webacy to help users enhance their security on Solana. 

• Exploring OSS: SolanaFM makes browsing open-source builds delightful.

Alright, let’s get it out of the way straight away — here are the best crypto-related memes from the Super Bowl. 

Now, let's kick off this week's newsletter edition 😏

Click on any underlined heading/hyperlink to learn more.

Spotlight

Cross-Chain Liquidity

Here's some trivia for you: Hamburg and Berlin are among the global cities with the most bridges — 2,496 and 1,700 respectively.

Conventional bridges have been instrumental for economic development and social integration for decades. As major transportation arteries, bridges are not only pivotal for improving accessibility and connectivity, but also for fostering cultural exchange.

Put simply: Due to bridges — among other aspects — both Hamburg (Europe's 3rd largest container harbour) and Berlin (Europe's 8th largest city) developed into economic powerhouses over the last centuries. 

In crypto, bridges such as Allbridge, Mayan, and Portal serve as a connective tissue as well. 

Moreover, all the bridges mentioned above are built on top of Wormhole, a connectivity platform that enables developers to build a multi-chain world.

Just recently, the Wormhole team announced its governance token, $W, so I thought it might be a good idea to look into cross-chain liquidity in this week's newsletter edition.

Apart from standalone crypto bridges, Wormhole also facilitates multi-chain applications that allow users to transfer digital assets directly within an application — ultimately bringing about a more delightful user experience.

Drift, for example, enables users to bridge assets directly within its application, either via Mayan or natively via Wormhole.

Phantom follows a similar approach with its Cross-Chain Swapper — powered by LI.FI. The feature allows users to bridge tokens directly within their Phantom wallets, bringing an effortless cross-chain experience to more than 3 million users.

By lowering the barriers, both Drift and Phantom have been pivotal in bringing in more liquidity from other ecosystems to Solana.

When analysing the data, it becomes clear that the most common bridging route is Ethereum to Solana, with Arbitrum to Solana trailing as the second most popular choice. Apart from that, USDC is the most bridged asset from EVM chains to Solana, closely followed by USDT and ETH. 

So, what are users doing after bridging to Solana? 

Let’s look at some data from January: 

• Even though over $400 million moved to/from Solana, the net inflow into the ecosystem was only a modest $9 million.

• In the first 24 hours, many users ended up swapping on Jupiter — where the median 24h swap volume was $268.

• About 15% of bridgers interact with Solana DeFi apps such as marginfi, Kamino, Tensor, and Drift.

Currently, Ethereum’s TVL stands at $41.2 billion and Arbitrum’s at $2.9 billion — so Solana's value capture of $9 million/month is rather miniscule. 

The bigger picture?

• Not many users from the EVM ecosystem have interacted with Solana yet. 

• Solana protocols and their associated communities need to increase user stickiness.

• Lastly, we need more frictionless cross-chain platforms such as Drift and Phantom.

After the Jupiter airdrop and in the last couple of days, the bridging activity among all blockchain ecosystems has somewhat slowed down — Lunar New Year induced postprandial somnolence I guess ¯\_(ツ)_/¯

Regardless, I'm confident that DeFi primitives such as Jupiter, NFT trading platforms such as Tensor, memescoins such as BONK & WIF, and devices such as Chapter 2 are shaping a flywheel that will increasingly capture more and more cross-chain liquidity over time.

Let’s circle back and take another look at this in a month's time.

Until then, the hat stays on. 

Number Of The Week

News Bites

Custom LSTs: Sanctum is currently helping teams launch custom liquid staking tokens (LSTs), so-called “validator LSTs”. The benefit? Validator LSTs greatly decrease the number of stake accounts and make the user experience on Solana faster and snappier. Also, validator LSTs are fully transferable and composable SPL tokens, allowing them to be used in all of Solana DeFi.

Exploring OSS: Open-source software fosters collaboration, innovation, and transparency. That’s why SolanaFM has made it really simple to browse and explore verified, open-source builds on Solana.

Proactive Security: Ponzi schemes, phishing attacks, market manipulations, and rug pulls are but a few risks users face in crypto. Awareness and due diligence are essential to mitigate these dangers, which is exactly what webacy enables users to do with its portfolio of security solutions — which will be available on Solana soon.

UAE Flair: The UAE embraces blockchain technology with progressive regulations, fostering innovation and investment. Fittingly, the Solana Foundation recently announced its partnership with ADGM — Abu Dhabi's International Financial Centre — to increase the adoption of Solana and its associated ecosystem in the Middle East.

Vibe Check: Solana's second mobile device — Chapter 2 — has now got more than 100,000 pre-orders in the books. Also, the Founder Window with a pre-order price of $450 is about to close — if you're interested, get into gear!

Expanding Horizons: If you, or a friend of yours, is an Ethereum developer who likes to tinker and learn new things, this new Solana course might be of interest 👀

Caught In 4K

Weekly Take

Keks & Giggles

And that's a wrap!

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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.}