There exists two different categories of crypto assets which accrue value in different ways

The first are the "payment currency" assets and the second are "protocol equity" assets

What's the difference and what does this mean for you?

👇🧵 With "payment currency" assets, you have cryptocurrencies in the most literal sense of the word

Crypto meant to be used like a currency

Being a new form of decentralized money that serve as an alternative to traditional government-backed fiat currencies

JUST IN: @chainlink has officially launched the Chainlink Reserve 👀

This economic upgrade creates a strategic LINK reserve funded by onchain & offchain revenue

Institutional adoption → protocol revenue → LINK purchases → Reserve

Here's what this means for $LINK 🧵👇 TL;DR

The Chainlink Reserve is an onchain strategic reserve of $LINK, designed to support the long-term growth & sustainability of the Chainlink Network

The Reserve is being built up by converting offchain and onchain revenue into LINK using DEX infra (initially @Uniswap)

The reason why @Coinbase Commerce doesn’t support self-custody $BTC baselayer payments is simple

UXTO chains like Bitcoin lack the programmability necessary to meet the requirements of most merchants

1) Merchants don’t want to be exposed to crypto price volatility risk

Ethereum and EVM chains solve this by being able to programmatically covert whatever crypto token is used as payment into a stablecoin like $USDC, when can then be optionally redeemed for $USD and sent to the merchant’s bank account

UXTO-based chains like $BTC lack the native programmability to convert their native asset into stablecoins onchain, so a custodial solution is required

2) Merchants don’t want to deal with manual burden of resolving incorrect payments (eg: underpayment)

Ethereum and EVM chains solve this by being to programmatically reject payment with incorrect payment amounts

This is literally a single line of code in a smart contract (require payment amount == invoice amount, otherwise revert)

UXTO-based chains like $BTC lack the native programmability to revert payments based on amount, so a custodial solution is required

—

Net result is that Coinbase made a calculated decision that the overhead/friction/cost of supporting baselayer $BTC payments was simply not worth it

Payment processing for self-custodial wallets is challenging, it’s not nearly as a simple as just giving a customer an address to pay into, they will fuck it up, it needs to be idiot-proofed

Can lightning fix this for $BTC? Possibility, but there’s a great deal of friction today in terms of managing inbound/outbound liquidity and channel rebalancing

Lightning also means you can support one additional asset, $BTC, while integrating with EVM chains means you can accept hundreds to thousands of crypto-assets (including stablecoins and $WBTC) and get paid directly into your bank account programmatically if you desire

That said, I hope Lightning improves enough to make it a realistic option for merchants to leverage Additional context/commentary from the Coinbase Commerce team themselves about UXTO payment support:

https://twitter.com/lauren_dowling_/status/1758985684340322656

Happy new year frens, welcome to 2024 🙌

Obligatory thread of some of my unfiltered thoughts and predictions regarding the major crypto trends this year

🧵 • Bitcoin as a Dominant Asset Class

The catalysts for $BTC are clear; a dozen or so spot ETFs a week from approval, halving in April, multiple interest rate cuts, and fiat money printer brrrrr

Initial ETF inflows won’t be as massive as expected but will ramp up over the year

A liquid restaking token that is backed by liquid staking tokens deposited in a restaking protocol which rehypothecates staked ETH

This is getting pretty deep, can we add another layer of liquidity and risk here? I don’t think we have enough

https://twitter.com/Shoalresearch/status/1736811526458421378

Note that there’s four+ layers of risk

1. Risk of staking ETH
2. Risk of liquid staking ETH
3. Risk of restaking ETH
4. Risk of liquid restaking ETH

You’re not only exposed to slashing and smart contract bug risk at each tier, but risks that only appear when composing protocols

"Chainlink is just an oracle"

What started as a single ETH/USD Price Feed has since expanded into a fully-featured platform of services

There are now 1,000+ #Chainlink oracle networks that span external data, offchain compute, and cross-chain interoperability

A thread 🧵 Oracles connect blockchains to external systems, enabling them to execute based on inputs/outputs from the real world

Before chainlink, oracles were highly centralized and insecure, with frequent oracle attacks resulting in exploits and loss of funds

garbage in -> garbage out

Arta TechFin, a Hong Kong-based financial services institution, is collaborating with #Chainlink Labs on the creation of regulated, fiat-based, cross-chain tokenized funds 👀

Chainlink CCIP will enable the transfer of fund tokens across public and private chains, increasing liquidity through cross-chain atomic settlement

Chainlink Data Feeds will provide transparent data for onchain Net Asset Value (NAV) reporting, making the data instantly available to all market participants

Chainlink Proof of Reserve will verify that the onchain fund tokens are backed and secured by designated assets under traditional and crypto custodians

The future is on
Arta TechFin (HKSE: 0279) is a hybrid financial (HyFi) platform bridging traditional finance with blockchain-based financial system via technology innovations

Its regulated one-stop solution enables corporates, financial institutions, and family offices to access traditional assets and digital assets

Arta TechFin, through its various subsidiaries, are licensed under Hong Kong Securities and Futures Commission

Other licenses include Hong Kong Stock Exchange participant, insurance brokerage license, trustee license and money lending license in Hong Kong as well as Eurex and Chicago Mercantile Exchange participants

$LINK is the true institutional coin

And not because of flimsy handwavey narratives or vague hyped up “connections”

But because @Chainlink has been working directly with the largest financial institutions globally on accelerating tokenized asset adoption via #CCIP

🧵 The Society for Worldwide Interbank Financial Telecommunications (@swiftcommunity) on using CCIP for interoperability



Swift is used by 11,500+ financial institutions globally for inter-bank messaging, facilitating international money/security transfers swift.com/news-events/pr…

Swift published a new results report about their recent collaboration with #Chainlink & 12+ of the largest financial institutions on using CCIP for blockchain interoperability 👀

CCIP connected existing Swift infra to multiple public/private blockchains

swift.com/news-events/pr…






Participants in the collaboration includes DTCC, Clearstream, Euroclear, Citi, BNY Mellon, BNP Paribas, Lloyds, ANZ Bank, SDX, and more

These are some of the largest financial institutions and market infrastructure providers in the world 🤯

https://twitter.com/ChainLinkGod/status/1683232386438565889

Why does @PayPal launching a stablecoin $PYUSD on Etheruem matter?

Let’s dive in 🧵👇 1. $PYUSD shows there is clear demand from financial services companies to tokenize assets on blockchains

Tokenizing dollars is the most straightforward asset to tokenize, and is directly relevant for payment processors like @PayPal
blog.chain.link/tokenized-real…

1/ Swift recently announced a collaboration with #Chainlink and 12+ of the largest financial institutions and FMIs in the world around using CCIP to enable connectivity with and interoperability between public/private blockchains

Who are these participants? 🧵👇 2/ The Society for Worldwide Interbank Financial Telecommunication (Swift) is the primary interbank messaging network for financial institutions globally

11,500+ financial institutions from 200+ countries use Swift to facilitate $5 Trillion in transaction volume per day

1/ #Chainlink's Cross-Chain Interoperability Protocol (CCIP) is officially live on mainnet 👀

What does this mean for the cross-chain ecosystem and what new capabilities does CCIP bring to the table?

Let's dive in 🧵👇 2/ Web3 today consists of hundreds of independent L1 chains, L2 rollups, appchains, sidechains, subnets, and more launching every week

To create a truly interoperable Web3 ecosystem, data and value needs to be able to move seamlessly between chains

This is where bridges come in

A 🧵 of some of the interesting insights from the recent #Chainlink Product Q&A on Discord with Chainlink Labs CPO @kelmoujahid CCIP is on-track for mainnet early access launch this summer, with general availability planned for later this year

The crowdsourced @code4rena for CCIP also recently finished

The readme includes a good overview of CCIP's architecture
github.com/code-423n4/202…

For Web3 to succeed, each layer of the Web3 tech stack needs to become economically sustainable

⛓️ Blockchains
📄 Applications
🔮 Oracles

In pursuit of this goal, #Chainlink is pioneering the creation of a sustainable oracle economy 🧵
blog.chain.link/sustainable-or… Web3 represents a global movement focused on replacing prone-to-failure trusted intermediaries with decentralized trust-minimized infrastructure

Despite the bear market and all the fear, development hasn't stopped, but actually increased

Web3 is inevitable

Both Ledger and Trezor can, in theory, publish signed malicious firmware updates that siphon keys from user devices (assuming users accept the firmware update)

This is simply a part of the trust model with hardware wallets with upgradable firmware But when the firmware is open source, it can be validated by the security community and alarm bells can be raised if there’s any funny business

If the firmware is closed source, it’s a black box and its capabilities cannot be verified, requiring full trust in the manufacturer

BRC20 is a very weird and inefficient token standard built on top of Bitcoin, ordinal theory, and NFTs

To mint a BRC20, you create a ‘mint’ NFT with the amount to be minted, in competition with others via a priority gas auction

To transfer/sell an BRC20, you create a new… twitter.com/i/web/status/1… You can get a sense of the very high quality BRC20 tokens that are currently being traded here
brc-20.io

Native tokens are fundamental to the creation of secure, scalable, and useful decentralized infrastructure protocols

A 🧵 on why tokens for core Web3 infra are in-fact needed Tokens solve the chicken or egg problem

A two sided marketplace can be bootstrapped into existence via subsidies (demand + supply side) in a credibly neutral manner before user fees reach sustainable levels to fully cover service provider operating costs + profit margin

⛓️ Introducing #Chainlink Functions ⛓️

A new serverless Web3 platform that enables devs to connect their smart contracts to *any* Web2 API and run custom off-chain computations

Includes integrations for @awscloud, @Meta, and @googlecloud, and more
blog.chain.link/introducing-ch… What's so cool about this?

Chainlink Functions is a truly self-service oracle solution

No need to host/run your own infra or even interface with @chainlinklabs or #Chainlink node operators

Connect your dApp in a few minutes with just a few lines of code
techcrunch.com/2023/03/01/cha…

A mega-trend is on the horizon for crypto

Tokenized real-world assets (RWAs) are now being issued on public blockchains by a growing number of Web3 projects and instituions alike

How and why?

This blog is my thesis on RWAs 🧵
blog.chain.link/tokenized-real… Firstly, why do people care about crypto and DeFi in the first place?

Because of the properties enabled by public blockchains:

- Atomic settlement
- Transparency
- User control
- Reduced costs
- Composability

Tens of billions of dollars have been absorbed into DeFi

It’s early 2022 and you want to earn some yield on your crypto, but you don’t want to get rekt so you diversify

You want some stability, so you put half your portfolio in the $10B stablecoin $UST and lend on @anchor_protocol for 20%

Nice, but you want directional exposure too You already have exposure to $UST and the ecosystem seems to be rapidly growing

So you get some $LUNA and stake it with @LidoFinance for 8%

You then deposit the $bLUNA to @anchor_protocol to leverage up

$UST is now a $20B stablecoin (and $LUNA $40B), you seem validated

The crypto ecosystem is quite bad at naming things, too much techno-jargon and acronyms

They're called cryptocurrencies, but most tokens aren't trying to be currencies

NFTs? No Fucking Thanks, I mean come on, just call them digital collectibles Smart contracts? They're neither smart nor contracts, decentralized applications is slightly better but they're really automated agreements

Gas? Let's not make the negative ESG narrative worse

LSDs? Let's not make the dark market connotations worse