Sup, nerds!

Here’s what you’re getting in today’s edition:

• 💅 This is cool: $2T-$10T coming to crypto in the next 6yrs

• 🔎 This seems important: Why you should ignore ETF staking

• 🤝 Partner: The first AI-powered startup unlocking the “billionaire economy” for your benefit​

• 🔪 Let's dissect this: One big stat for Ethereum L2s

• 💡 Bellwethers in Web3: Brittany Kaiser, Own Your Data Foundation

Terms used in this edition (click for an explanation, or ask Web(GPT)3!):
Blockchain, layer 2’s, staking, decentralization, web3.

💅 This is cool:

$2-10 Trillion of New Investment Is Expected To Come to Crypto in the Next Six Years

In one sentence: There’s a high likelihood that real world assets (RWAs) will be launched on the blockchain and attract $2T-$10 in investment by 2030, but it’s not going to be easy.

Imagine being told you were only going to get one bonus this year.

If you were used to getting multiple bonuses a year, this might be disappointing.

But if you’d never received a bonus in your life, it’d comes as welcomed news.

That’s kind of how we feel about this latest McKinsey report.

The firm is estimating we’ll see $2T worth of real world assets, or RWAs (think: stocks, and commodities like oil and gold) being traded on the blockchain by 2030.

Which is lower than previous reports from competing firms that had a number closer to $10T by 2030.

But really, RWAs only entered the realm of plausibility a few months back, when major traditional financial firms started to publicly endorse the idea, and begin working towards making it a reality.

So whether we’re talking $2T or $10T worth of RWAs by 2030, it doesn’t really matter — both options are better than $0.

And honestly, the slow approach makes sense, for these three reasons:

1. Regulatory friction
   
   The SEC has buckled, embracing Bitcoin and Ethereum ETFs…but they’ve done so begrudgingly. Allowing for the stock market to move onto blockchain rails is bound to be slowed by regulatory red tape.
    

2. Reliable blockchains aren’t fast enough
   
   The powers that be have shown interest on building within the Ethereum ecosystem — which is doable for now, but not scalable just yet.
   
   ‘High speed’ Ethereum layer 2’s, like Base, have a theoretical limit of ~1,400 transactions per second (TPS), while the NASDAQ stock exchange processes ~20,000 TPS.
    

3. Fast blockchains aren’t reliable enough
   
   “Ok, so why not build on Solana instead of Ethereum — it has a max theoretical limit of ~65,000 TPS?”
   
   Well, Solana has a habit of going offline for hours/days at a time. This could/should be fixed in the future, but the traditional financial world will want this to be proven through heavy testing before they launch RWAs there.

The takeaway:

There’s a high likelihood that RWAs will be launched on the blockchain and attract trillions of dollars of investment.

…it’s just going to take a minute (and a whole bunch of work).

🥇 Want the news before anyone else?

🔎 This seems important:

Why You Should Ignore the Discussion Around Ethereum ETF Staking

In one sentence: The SEC is a slow moving organization — they’ll probably allow ETH ETFs to partake in staking down the line, just not in their first iterations.

There’s a lot of grumbling around the fact that the Ethereum exchange traded funds (ETFs) won’t have staking.

The argument being that these funds will be put at a disadvantage because they won’t (legally) be able to earn interest on their Ethereum holdings.

It’s an ongoing point of discussion/argument that we’ve largely tuned out of ever since we heard a regulatory expert give response to the matter.

And we figured we shared it with you, so you can tune out the noise and focus on more important things.

(Like slowly raising the height of all the desks in your office, so everyone starts to convince themselves they’re shrinking).

The regulatory big-wig’s response went something like this:

‘The SEC is a slow moving organization, and it approved the ETH ETFs in a hurry.

Figuring out the complexities of staking and how to build it in to reliable regulatory frameworks is going to take time.

They’ll probably allow it down the line, just not in the first iterations of ETH ETFs.‘

And BOOM!

You now have one less crypto-centric internet discussion to focus on.

We wish you all the best on your office desk psyop xx

🤝 Partner:

The First Ai-Powered Startup Unlocking the “Billionaire Economy” for Your Benefit

It’s one of the oldest markets in the world, but until recently, the average person would never dream of investing in it. Until a Harvard data scientist and his team cracked the code with a system to identify “excess alpha.”

The best part? Everyday people are already benefiting.

The company that makes it all possible is called Masterworks, whose unique investment platform enables savvy investors to invest in blue-chip art for a fraction of the cost. Their proprietary database of art market returns provides an unrivaled quantitative edge in analyzing investment opportunities.

So far, it's been right on the money. Every one of their 16 exits has been profitable, with recent exits delivering +17.8%, +21.5%, and +35.0% net annualized returns*.

Intrigued? Web3 Daily readers can skip the waitlist with this exclusive referral link.

_{*Past performance is not indicative of future returns, investing involves risk. See disclosures masterworks.com/cd.}

🔪 Let's dissect this:

One Big Stat For Ethereum L2s

In one sentence: 50% of all Ethereum-based transactions happened on layer 2’s (L2s) in the first half of 2024, rather than on Ethereum itself; which has its pros, and its cons.

Did you know that over 50% of all Ethereum-based transactions happened on layer 2’s (L2s) in the first half of 2024, rather than on Ethereum itself?

(At least, in terms of the total volume of transactions).

On one hand this is a sign of great innovation!

L2s can generally handle more transactions at a lower cost, making Ethereum-based transactions cheaper and faster for everyone.

By moving transactions off the main Ethereum chain, L2s can also help make the whole network run smoother by reducing congestion.

BUT - before we get too excited about Ethereum palming off half of it’s transactions over to other Ethereum-based chains, there’re risks to L2s too.

For example, look, maybe it’s just us, but the number of L2s that’ve been launched on Ethereum feels overwhelming.

And while that may help from a user experience side of things, having so many options can confuse users and spread assets thinly across different platforms.

Also - the big one - many L2s rely on centralized parts, which goes against the entire decentralized value prop of Ethereum.

Take sequences for example (they’re the things that decide the order of transactions to be processed in, before they’re processed).

If a single, centralized entity controls the sequencer, that introduces a critical central point of control and a possible point of failure.

So, while innovation and improved user experiences are great for web3, here’s hoping the incredible teams building L2s don’t lose sight of the original value prop of blockchain technology.

And that, our friends, is decentralization.

💡 Bellwethers in Web3

"Bellwether's in Web3," is a daily profile series recorded live with Nolcha Shows and Movement Labs in collaboration with Bellwether Culture. Check out the latest video below.

Interview: Brittany Kaiser,
Co-Founder of the Own Your Data Foundation

Brittany Kaiser is the Co-Founder of the Own Your Data Foundation. She is also a Co-Founder of the Digital Asset Trade Association (DATA), a nonprofit lobbying firm advancing legislative reform protecting the rights of individuals to control their digital assets. She is the co-founder of one of the world's largest bitcoin mining companies and the only 100% renewable bitcoin mining company, Gryphon Digital Mining.

Brittany is also the primary subject of the Netflix Original documentary The Great Hack.

Follow: @own.your.data (IG), @OwnYourDataNow (Twitter)