Dispatch #51: Solana Season

In this patch of your weekly Dispatch:

• Solana’s massive run
• NFT’s monster month
• Nexo's double referral bonus

The Big Idea

Solana Is the Breakout of Summer 2021

Let's get one thing straight – summer is not over, regardless of how many other newsletters tell you otherwise. Need proof? A few months ago, the Solana community hype-ily promised that it was about to be the “Summer of Solana.” As we head into Labor Day Weekend, you gotta think they were right.

SOL is up about 75% this week, and 310% this past month. It has an incredibly engaged community of developers and projects that promises only to grow with its just-launched “Ignition” global hackathon that features $5M in prizes across 4 tracks: DeFi, Web3, Gaming, and Art/Collectibles.

So what’s the reason for such rapid growth?

First, it’s fast – claiming to process over 50,000 transactions per second. Second, it does that cheaply – with $0.01 transaction costs. That stands in stark contrast to Ethereum, whose network is seeing transaction fees in the tens or even hundreds of dollars.

This is especially relevant in the context of the incredible swirl of activity around NFTs. They are one of the biggest contributors to Ethereum gas fees and have been parabolic. In that context, NFTs on Solana have quickly become a major draw, with projects like the Degen Apes and more recently Aurory leading the way. Hot decentralized music platform Audius also chose Solana for NFT support.

So with this rocketship, what’s the risk? Solana’s main critique is about whether it is decentralized enough. Investors have argued vociferously that our conception of and heuristics of decentralization need to evolve from the requirements of a censorship-resistant store of value like Bitcoin.

Whatever the case, Solana season is just beginning. Put on your pit vipers and join in the fun.

The Latest In…

Nexo Friends With Double Benefits

You might have more friends than you think and think hard is what you should do.

Helping your friends get into Nexo has never been more rewarding – this September, we’ll double your referral bonus. For a limited time – from Sep 1 to Sep 30, 2021 – get $20 worth of Bitcoin for every friend that opens a Nexo account and tops up $100 worth of assets.

So start sharing the love and make the most of your social circle with #ReferralX2.

The Latest In…

Exchanges

It was a fairly big week in exchange news! Binance had another jurisdiction, Singapore, tell it that it was likely operating illegally and needed to quit it. CZ also said in an interview that Binance.US could go public in three years. FTX.US, meanwhile, made headlines for meeting with the CFTC leading to their acquisition of LedgerX – one of the few US crypto venues licensed to trade certain derivatives products. Given how much bigger derivatives trading is in traditional markets than spot trading, could this portend some larger market structure shifts in the US crypto scene?

The Latest In…

Mainstreaming

The steady march of crypto infiltrating the mainstream continues! This week, there were a few notable moments. Crypto Punks maker Larva Labs has signed a deal with one of the world’s biggest talent agencies UTA. This suggests that Punks might find their way to TVs, movies, and more. Twitter is reportedly testing out Bitcoin and crypto features for tipping. And speaking of Twitter, Reese Witherspoon announced on Twitter that, a few weeks after selling her company for more than $900M, she had bought her first ETH. rETH Witherspoon, anyone?

The Latest In…

Regulations

It’s been a little quiet, compared to the insane dust-ups of a few weeks ago, but still, we got a bit more valuable information on the regulatory front this week. First, SEC Chair Gary Gensler keeps talking about crypto every chance he gets. This week, he reached out and gave a speech to the European Parliament that reiterated his key talking points that: 1) crypto was big; 2) it needed to be absorbed into the public policy framework, and 3) stablecoins and exchanges were the most dubious. He also seemed to indicate in a separate interview that Bitcoin ETFs were the most likely crypto ETFs to be approved.

On top of this, we also learned this week that the Treasury Department and Biden Administration are pushing for more crypto tax reporting rules, specifically reporting around foreign transactions. It has been a huge wake-up call for so many about the brokenness of the political process to see these incredibly consequential rules shoved into unrelated legislation through backroom dealings.

The Week’s Most Interesting Data Story

NFTs’ Insane Month

Usually, our modus operandi on the Most Interesting Data Story is to find some under-the-radar stat that shows you something about the market that you might not have understood otherwise. This week though, we gotta acknowledge that the most insane number is a loud one: the explosion in NFTs. These traded around $325М in July….and $3.3B in August. Over 900% growth in a SINGLE MONTH. What’s even wilder is that 98% of that was from just a single platform: OpenSea. The incredible surge was driven by an interest in key OG collections like the Crypto Punks. Even Visa bought one last month! The question is quite simple: can NFTs keep going up?

Hot Topics

What the Community Is Discussing

A great thread from Ikigai’s Travis Kling about the state of the Bitcoin market and what might happen next.

Ever wondered where the “yield” in “yield farming” actually comes from? Investor Adam Cochran’s got you covered.

This one was…uhhh…controversial, to say the least.

What to Watch for Next Week:

• How many friends will you refer to Nexo?
• Will BTC have an aggressive break in one direction or the other?
• Will Loot continue to capture crypto’s fickle attention?