Bitcoin’s wreaking havoc, and we are loving it. ❤️‍🔥

There hasn’t been a good enough time to watch Bitcoin than now – It’s a 1 trillion dollar asset once again and has attained a new ATH against the Japanese Yen. It has also left behind giants like Walmart, Tesla, and Berkshire Hathaway. 🚀

Meanwhile, BlackRock is busy gobbling up more $BTC than ever (10K in a single day!). Its little kitty is too full at $5 billion worth of $BTC. Whoa! That’s 0.5% of the entire $BTC supply. 👀

But there are more interesting stories to explore today, and we urge you on this rollercoaster ride. Enjoy! 

Will rollups become redundant as Dencun upgrade goes live on Ethereum? 

The Denub-Cancun or Dencun upgrade went live on the Sepolia testnet after a successful Holesky testnet run. It will most probably go live on the Ethereum network on March 13. 

The Dencun upgrade brings proto-danksharding to Ethereum via data blobs, reduces transaction fees by 2x-10x, and improves scalability and transaction throughput to 100k TPS. 

Does this mean Ethereum’s L2 ecosystem, especially rollups, will become redundant? 

We think not. 

Ethereum functions as an ecosystem of interlinked chains and rollups. Rollups like Arbitrum, Optimism, zkEVM, etc., add much-needed scalability by bundling up transactions and moving computations off-chain. 

The Ethereum ecosystem recently crossed 2 million daily users and the entire L2 TVL is now over $24 billion. Most L2s are already providing functionalities beyond extra capacity providers. Polygon is a $3 billion ecosystem in itself. 

Recently, a transaction on Ethereum cost 42 ETH!

Most L2s are already relatively cheaper and faster than Ethereum. 100k TPS and 10x reduction in fees are theoretical targets for Ethereum now. Moreover, the upgrade itself brings ease and speed for L2 transactions. 

The Dencun upgrade isn’t here to cannibalize but to upscale the ecosystem as a whole. Read this Forbes article for some more interesting insights. 

What’s fishy in Celsius’ ‘successful’ bankruptcy exit plan 

The now-defunct crypto lender Celsius Network filed for Chapter 11 bankruptcy on July 14, 2022. In 2024, the Celsius team readied a plan to successfully exit it by distributing $3 billion to its creditors. 

There’s more…

Celsius’s creditors will also be shareholders of a bitcoin mining company, Ionic Digital. Ionic Digital is the obligation set upon by the US bankruptcy court on Celsius as part of the exit plan. But why a Bitcoin mining firm?

Oh! Based on the SEC's feedback, it’s their new and safe venture that staking activities must be regulated, so mining it is for them. 

The reimbursement process has begun, and tickets and communication are in full flow. But something doesn’t seem right. We have been closely following their exit plan and want to point out a few of our concerns. 

But first, the backstory of how Celsius landed itself into this mess. 

The backstory:

Celsius was a trusted name in the DeFi scene until the 2022 fiasco. The company managed a legacy portfolio of cryptocurrency loans and earned staking fees from validating transactions. 

In June 2022, the company halted customer withdrawals citing extreme market conditions as the reason. 

The company took away $4.7 billion in customer funds. Customers had no recourse if the protocol went bankrupt. Celsius only had $167 million in liquidity in its last days! 

It filed for bankruptcy in July, and in November, the US court accepted the filing. 

Our take… 

Celsius’s official communication says it is returning customer funds in Bitcoin and Ethereum, regardless of what their accounts held, via Venmo, Paypal, and Coinbase. 

The initial distribution will be 57% of the creditor’s claim amount. But the catch is your reimbursement is dollarized, i.e., you get paid at 2022 $BTC and $ETH prices in dollars and not at current prices, and on yes, the illiquid Ionic Digital shares. 

14% will be distributed in the future. When we don’t know.

The entire distribution process has been highly mismanaged, with some people receiving the email, and some not. There have been phishing attacks, fake airdrops, and delays in payments.

The situation looks bad, and people feel duped despite the payback. If you want to know more about the reimbursement plan and more updates, check out this video. 

Fireside chat with Anndy Lian on the impact of real-world tokenization 🔥

Larry Fink’s assertion on real-world asset tokenization as the future of finance was no long talk. 

Before that, Anndy Lian, an intergovernmental blockchain expert and author of the book ‘Blockchain Revolution 2030,’ engaged in an insightful fireside chat with Faraj Abutalibov, Chief Commercial Officer of the Venom Foundation, on the future of tokenization. 

FYI, tokenizing real-world assets implies representing them over the blockchain as tokens. Tokenization can open up new avenues for the stagnating TradFi sector but it comes with its set of challenges. 

The overview, use cases, and impact 

• Tokenization has seen evolving perceptions of governments and institutions from initial skepticism to that of active advocation of RWAs (real-world assets). The active endorsement from significant players also sets the stage for widespread adoption. 

• Potential use cases beyond traditional assets include tokenizing carbon credits, stablecoins, and their recognition by government bodies, especially in the wake of CBDCs. Much of it depends on a broader shift in how governments perceive digital currencies.  

• Despite the rising momentum, there’s a lack of a clear revenue model for companies engaged in tokenization. As such, the path to profitable sustainability and the long-term viability of the tech is still bleak. 

• Larger companies with diverse revenue streams have an upper hand over startups who are faced with the intricacies of fundraising and uncertainties in proving their revenue-generating potential. 

• Anndy considers art NFTs as a successful use case for tokenizing physical art and a great example for exploring other opportunities. 

• Tokenization faces regulatory complexities, operational hurdles, skepticism around its practicality, lack of standardization, etc. A concerted effort from all stakeholders can alleviate many of these issues. 

The future of tokenization

RWAs can be a transformative force for the financial sector. Anndy references his book “NFT from Zero to Hero,” citing the role of NFTs in tokenization. He says growth in the retail investor base will become a pivotal catalyst for the next surge in crypto adoption, including tokenization. 

The deep dive was a part of the 2023 World Tokenization Summit in Dubai. If profound crypto bro camaraderie invokes you, you may find the other fireside chats here. 

Have you read Binance’s report on Tokenization? No, you are missing great stuff. 

Here’s how the current RWA ecosystem looks.

More from the decentralized world

• BTC ETFs Account for 75% of Investments: The past two weeks have seen 3/4ths of the Bitcoin investments coming from the 11 ETFs approved a month back.  Also, investment from these ETFs has risen to 2% of the total historical investment ( realized market capitalization) in Bitcoin in just one month. 

• EigenLayer is now the 4th Largest Restaking Protocol: EigenLayer is a staking platform for Ethereum. The protocol became the 4th largest staking platform with a $7 billion TVL, up by 307% in just a month. 

• Are BTC ETFs Eating Into Spot BTC Trading: Robinhood says otherwise. Direct Bitcoin trading is still a more popular option for traders. Only 5% of Robinhood’s trading occurs through Bitcoin ETFs.  

Don’t miss these! 

• $37 billion worth of BTC changed hands on Feb 14

• Ether Staking Deposits Touch $85 Billion

• VC-backed Crypto Exists at a 3-year Low Despite Spot Market Resurgence

• Fake Curve Finance App Listed on Apple Store

• Valentine’s Special: Romance Scams Remain a $1B Opportunity For Scammers

Before we go…What’s up with Ethereum’s co-founder?

Is he trying to bank Ethereum’s gain?

Think and let us know.

See you next Thursday. 👋