DOT’s ETF-ectively on the way?! (May 19th to May 25th)

What is up, my friends!

The news of the Ethereum ETF is a defining moment for the web3 industry, and some credit certainly goes to Gavin Wood for his instrumental role in building it. When it comes to Polkadot, we see that much of our Chief Architect's knowledge and more has gone into paving the way forward.

This week’s top story will be covering what this ETF could mean for Polkadot. And building on the sentiment of defining moments, we will also include the week’s defining news in the Polkadot ecosystem.

With Ethereum leading the headlines it’s a good opportunity to dive into Polkadot’s leading Ethereum Virtual Machine parachain, with our profile report. Furthermore, Moonrise signifies the latest iteration on the way for Moonbeam.

If you're interested in contributing to this very newsletter, consider the finders role on our Discord, where you could be rewarded along the way. Our finders program continues to fuel the news section every week. It’s great for getting minds sharp as the next stop on the events calendar is Consensus 2024 in Austin, Texas.

When it comes to eventful moments, did you catch the interview with Raoul Pal, the Real Vision Spaces, A glass with Gav, and The Gavliator. They all featured Gavin Wood!

Without further delay, let’s be on our way to the captivating stories and all the eventful news updates.

Dodow, Chief Editor

Top Story of the Week - DOT defining News

Written by yay.oi

What's zooming fam? I hope you've had some time to calm down after that nail-biting Indy 500 race on Sunday. There was some big news in the crypto space this week, but what does this mean for Polkadot?

You would've heard by now that the SEC approved eight spot ETH ETF applications on Thursday. What this means for Ethereum is an implication that the SEC does not regard it as a security, which has been a point of contention for many tokens.

Already there is chatter about which token will be next. Many have suggested Solana, but there's a problem. As recently as November 2023, the SEC has explicitly labeled SOL, along with many other tokens, as a security.

Polkadot, on the other hand, does not feature on the SEC's list of securities. Since November 2019, the Web3 Foundation has been cooperating with the SEC to ensure that Polkadot fulfilled the requirements to be classed a non-security.

By November 2022, the Web3 Foundation declared that Polkadot had morphed from a security into software. They achieved this through careful compliance measures regarding the offering, selling, and marketing of DOT tokens along with achieving true technological decentralization.

The decentralized governance structure of the Polkadot DAO ensures that everything from treasury spends right down to the code-changes protocol level are decided by the stakeholders. It's just like Gavinus Silvanus Meridius said in The Gavliator, Polkadot is “the only true DAO”.

So, with all of the measures that Polkadot has taken to comply with SEC requirements, does that mean that DOT could jump the queue and become the next spot ETF? At this stage it still looks unlikely.

A big factor that led to the approval of the Bitcoin and Ethereum spot ETFs was the backing of the CME group. CME listed BTC futures in 2017, and ETH futures in 2021.

The SEC made use of CME's market surveillance system to detect fraudulent and manipulative acts, in the case of the ETH ETF going back 31 months. Any new spot ETF would need to undergo similar scrutiny, which without tools such as CME's could take months or years.

Pinning hopes on a Polkadot ETF at this point seems somewhat premature. However, we have plenty to get our hopes up about with Polkadot's technological stack.

After some number crunching over at Parity, we now have some metrics to quantify the massive gains async backing has brought to the parachains. When combined with proof of validity reclaiming, they found that throughput (TPS) has increased by 10x.

Of course, flexing over transactions per second may become redundant when Polkadot goes transactionless with JAM. Nonetheless, it is targeting 852mb/s of throughput, which is mind-blowingly fast.

Speed has been a hot topic this week, and Sunday was no exception. Our boy Conor Daly's Polkadot branded car reached speeds of almost 365km/hr at the 108th Indianapolis 500.

With a starting position of 29, the odds were against the hometown favorite. That said, he did manage to spend some time in first position, and in the end took the Biggest Mover award for finishing 19 positions ahead at 10th place.

Conor has been a great spokesperson for Polkadot, and his efforts don’t end with the Indy 500 race. Catch Conor at Consensus 2024 in Austin where he'll be signing swag and taking on competitors in Exiled Racers.

From signing swag to taking swigs, Episode 2 of “A Glass with Gav” dropped this week.

In this installment, Mark and Gav sampled a glass of Kavalan Podium from Taiwan. It was reminiscent of an unpeated Bruichladdich, according to our founder and chief whisky sommelier.

The episode was filmed shortly after Gav's Sub0 keynote in Bangkok where he introduced JAM for the first time. He likened the advent of JAM to Amazon moving past just selling books.

Polkadot won't just be securing parachains anymore, it will be something much grander. JAM is an embodiment of Gav's “stay flexible” mantra. It is not a pivot, it is flexibility enhancement.

So, is the SEC's approval of spot ETH ETFs a sign of a newfound regulatory flexibility? With crypto now becoming an election topic, it's a possibility.

The Financial Innovation and Technology for the 21st Century Act (FIT21) has begun its passage through US Congress. If the bill passes, sufficiently decentralized tokens will move under the jurisdiction of the much more flexible Commodity Futures Trading Commission (CFTC).

However, even with a new regulatory framework, there would still be an enormous gap in market caps between BTC and ETH compared to any of the potential spot ETF candidates. Traditional mainstream financial institutions may not be interested in assets of that size.

Realistically, smaller cap tokens are more likely to be included in a basket of assets such as the private index funds offered by Grayscale. Polkadot already features in their GDIF and GSCPxE fund, but present regulations don't allow these products to be offered to retail investors.

So, the bar is still pretty high for any new crypto spot ETFs. We would need to see CME backing, more flexible crypto regulation, and a desire from traditional financial institutions.

However, part of morphing from a security is focusing on technology rather than investment. Are mainstream investment products really going to benefit the network? While mainstream adoption through ETFs is a positive financial indicator, perhaps technological innovation and network growth are the real indicators we should be focusing on.

The Moonbeam way!

Written by Dodow

The Ethereum Virtual Machine (EVM) is the most widely adopted blockchain execution environment in Web3, boasting the largest developer and user base due to Ethereum’s network effect. Many blockchains have chosen to use it to instantly entice users with the familiarity of UX/UI as well as tap into a plethora of Solidity developers.

As recently reported by the Kusamarian, when it comes to EVM adoption on the Polkadot Network, Moonbeam currently stands out as being the leading parachain, with 130K daily transactions in April and 6 million new accounts added within a one year period.

Founded by Derek Yoo of Purestake and now Moonsong Labs, the approach is simple: an Ethereum-compatible smart contract platform that makes it easy to build natively interoperable, decentralized and permissionless applications.

Success began with the strong momentum of Moonriver, its canary chain on the Kusama Network, during the last crypto bull cycle in late 2021. Many who crowdloaned to Moonriver likely reaped the rewards. Additionally, there was the captivating Moonsama NFT collection who drove significant attention on the social layer and has since gone on to launch its own chain.

It was no surprise that by the time Polkadot initiated the auctions to onboard parachains, Moonbeam received the largest contribution. The combination of Moonriver and Moonbeam for development led to early wins, attracting well-known dApps such as Sushiswap, Lido Finance, Beefy Finance, and Frax Finance who all appeared to implement with relative ease.

This is supplemented by integrations with the most popular Web3 developer tools, including Chainlink for Oracles, The Graph for Indexers, Metamask for Wallets, and much more.

Looking back, things took off really well after the Moonbeam token generation event: the staking was competitive, there were plenty of protocols building, and the DeFi scene was promising. Unfortunately, the Nomad bridge exploit in August 2022 and the toll of the bear market knocked the wind out of its sails.

The key thing to note is that exploits with Nomad and subsequently Multichain (on Moonriver) were of no fault of Moonbeam. It can be considered that, in general, bridge exploits have marred the industry; that said, advancements with approaches such as newer trust-minimized bridges are evolving in this space.

2023 was a year of continuous hard work to rebuild and move forward. Check out a couple of fantastic threads from the WagMedia archive created by Csaint. He does a comprehensive deep dive on Moonbeam and follows up with a huge update later in July on how Moonbeam enhances their value proposition.

At the present time of writing, Moonbeam continues to be Polkadot’s leading parachain in terms of active addresses as reported in Messari’s Q1 report. According to DeFiLlama there is a healthy TVL of around $46 million USD (this excludes any Liquid Staking activity).

The top dApp on Moonbeam is the lending protocol Moonwell, which originated from Moonriver/Moonbeam and is now gathering significant attention on Base L2. Along with a couple of DEXs, Stellaswap and Beamswap, which have seen decent volume, it forms a solid DeFi foundation that backs the number of active addresses.

It also appears that bridging has moved on, with leading names such as Axelar and Wormhole providing support. In particular, the partnership with Wormhole underpins Moonbeam Routed Liquidity (MRL), which is a bridging layer with a GMP pre-compile that makes onboarding ERC-20 tokens to Polkadot substrate based chains possible.

MRL currently is responsible for driving a high volume of TVL in and out of the Polkadot ecosystem. For instance, it has done a good job in supporting the HydraDX omnipool, currently bridged tokens make up a decent chunk of the TVL. With Hyperbridge and Snowbridge expected to go live on Polkadot this year, it will be interesting to see how it adapts.

When it comes to the community, Moonbeam certainly has a nice vibe, especially with gaming projects. Ecosystem gaming include Exiled Racers, The Damned Pirates Society, The Great Escape, and Zoombies World. Moonbeam was also the migration destination for Evrloot and more recently SFY Labs Age of Chronos, both established names in the Polkadot ecosystem.

Additionally, community-wise, Moonbeam can arguably be considered the place where Polkadot memecoin culture began, starting with Pink. Furthermore, the Lunar Gaming Festival initiative embraces community staking collators and community games, and more recently, the initiative tied gaming with memecoins by hosting the APRIL IS PINK event.

You can probably make the case that Moonbeam has reached a steady state, with much of the setbacks behind them. According to DeFiLlama 92.28% of the supply is circulating; inflation is targeted at 5% per annum, and 80% of transaction fees are burned, with the remaining portion going to the on-chain treasury.

The recent announcement of Moonrise represents an updated product roadmap, accompanied by a fresh rebrand. Building on past accomplishments, the update is filled with fascinating deliverables. Moonbeam's vision evolves from being just a chain to becoming an interoperable multichain Web3 hub that appeals to both the Polkadot and Ethereum communities.

First stop on the roadmap is to fortify the core, which includes enabling Polkadot Asynchronous backing to increase throughput by 8x, ensuring compatibility with Ethereum’s Dencun upgrade, implementing optimized governance, adopting Polkadot Agile Core time to scale vertically, and driving token sustainability through collaboration with Gauntlet. Additionally, there is an initiative to revitalize DeFi on Moonriver.

Next up is the continuous empowerment of builders with the latest tools for ease of development and debugging/monitoring. More cutting edge advancements include a new feature called Governance Tracks, which enables on-chain governance for dApps, and full support for EIP-4337 for Account Abstraction.

Ecosystem integrations are poised to potentially bring further growth to Moonbeam. It includes integration of Glacis, which is an abstraction layer for cross-chain transactions, and enhances GMP handling. Additionally, Moonbeam is pursuing tighter integration with Tanssi, utilizing MRL and other core features to become the base liquidity and settlement layer for its appchains.

Perhaps the most UX focused part of the roadmap is the deliverables for frictionless user experiences. Moonbeam calls it zkAuth, which enables Web2 authentication via Zero Knowledge technology for Web3 apps. More near term enhancements will include the improvement of MRL UX and addressing the challenges of native stablecoin flow via Polkadot Asset Hub.

Wrapping up, Moonbeam continues to be a leading parachain in the Polkadot ecosystem, and its focus on interoperability with Ethereum has made it well connected to other EVMs. They have remained relevant by supporting the wider Polkadot ecosystem and, conversely, they enable native dApps to venture out onto Ethereum L2s such as Base.

With the ever increasing saturation not only among EVMs but also among chains with different execution environments, Moonbeam has fared well. The on-chain metrics support this, and it’s a testament to the dedication of the builders within its ecosystem.

The Moonbeam way of making it easy extends to multiple aspects, from onboarding to liquidity provision. The updated product roadmap further reinforces this ethos, potentially making Moonbeam a great destination for an interoperable multichain Web3 hub.

General News

Written by Dodow

• Polimec protocol is now live. With 2M of Apillon's NTCR token set for sale, the evaluation period has started.
• Moonbeam reveals Moonrise, which is essentially their new roadmap. Two standout items include: frictionless experiences with ZK tech, and cosmetic rebrand. Additionally, you can expect core protocol enhancements, more integrations, and advancements in dev tooling.
• The fifth wave of the Polkadot Blockchain Academy (PBA) has kicked off in Singapore. The big cohort is made up of both in-person and remote students this time.
• Details of Polkadot Runtime 1.2.4 has been posted; it addresses the new Polkadot Ambassador Program as defined in Referendum 487 and more.
• Kusama People is a new system chain that addresses identity functionality and is now available in Nova Wallet.
• More DePINs are joining the Peaqosystem and this past week included: EV charging DePIN Charge.xyz, and Power bank rental DePIN JuiceUp.
• The first couple of Parachains who used coretime to renew their chains on Kusama have been revealed. First is Interlay/Kintsugi, and this is followed by Centrifuge/Altair. This was done using Lastic's coretime marketplace, and the cost was 5KSM. Additionally, the renewal burned 15KSM across the first 3 chains. InvArch's canary, Tinkernet, also renewed.
• DV and Polkadot validator Saxemberg provides some useful advice to those running Polkadot validators, following a recent incident.
• Unnamed Parathread 3358 has won Polkadot Auction 70 with a self funded bid of 300 DOT.
• Raise your glass for Episode 2 of A Glass With Gav, where Mark and Gav enjoy some Kavalan Podium single malt.
• Does WagMedia have a shot at the Oscars with "The Gavliator", a developer's revenge?
• Velocity Labs has been awarded a Web3 Foundation Decentralized Futures grant, to transform Polkadot into an innovative DeFi hub.
• Ser, do you know about Taniko, the new, easy-to-use asset management tool for Asset Hub?
• The first evaluation on Polimec has successfully reached its target, which means the Apillon sale will go ahead.

NFT & DEFI News

Written by Dodow

• Astar Degens holders are set to get an airdrop of Ninja!
• Blockchain Gamer has named Mythical as the number one blockchain game company of 2024.
• KodaDot has onboard a number of artists and their work will be featured at Berlin blockchain week.
• Check out Steve Makerspace's 'Enough' collection on KodaDot.
• Gavun Wud releases the Flappy Wud Gray Paper. It’s the technical specification of the upcoming free-to-play memecoin game.
• Here’s a sneak peek of racing against Conor on Exiled Racers.
• A star collection listing on Singular! Get set to mint your Youdles on 31st May. Price is 1K ASTR.
• BEEFY announces its liquidity incentive program, where you can earn up to a 25% reward.
• As part of the resolution to the Starlay incident on Acala, affected users will be airdropped tokens for Neemo Finance (an LST protocol on Bitlayer BTC L2).
• The WELL/GLMR LP on Stellaswap has been getting some boosted incentives.
• Bifrost put out an official statement about the vDOT incident to reassure users. It’s important to recognise the protocol and underlying DOT remained safe throughout.
• Check out Stellaswap's new stats page.
• Juicy APRs as you swim in the Omnipool. HydraDX announces launch details of the Polkadot Hydration campaign, which is set to start from June 10th.
• You can now use Nova Wallet for cross-chain USDC transfers between Polkadot Asset Hub and Pendulum.

Governance & Events News

Written by Dodow

• Polimec listing on the way as there’s a proposal on HydraDX governance about channel opening.
• OpenGov Ref 722, which is to open channels between Asset Hub and Sora, is failing. Alice und Bob raises the debate: should common good parachains (i.e. system chains) be permissionless?
• Pendulum referendum to accept HRMP with Bifrost. The plan is to use vDOT as collateral for the Spacewalk bridge.
• Memegov with GOVD?
• Encode Club hosted a workshop session with Apillon's CPO Nino Kutjnak to cover W3Transfer Back-end Architecture on May 22nd.
• You can meet Conor Daly at Consensus 2024 on 30th and 31st May, between 14:00-16:00 local time.
• Taking stage at Consensus 2024 on 31st May 11:00-11:45 local time will be Web3 Foundation CEO Fabian Gompf and Parity Technologies Interim COO Chrissy Hill.
• LAOS Network hosted a discussion on May 21st with the subject: Do We Really Need NFTs?
• Ajuna’s weekly community call on May 23rd covered network updates, migration details, Big Ballz Battles, Battle Mogs progress and more.
• Peaq welcomed recent projects Nukali and Farmsent with an AMA on May 22nd, and discussed the prospects of using the Nuklai marketplace to help Farmsent farmers monetize their data.
• Birdo hosted Centrifuge’s CEO Lucas Vogelsang to discuss how Real World Assets are transforming crypto markets on May 24th.
• Irina Karagyaur hosted guests from Harbour Industrial Capital to discuss the new ecosystem fund on May 23rd.
• Peaq held a session with ATOR on May 24th to cover privacy and how it benefits the Peaqosystem.
• The Real Vision Spaces where Gavin Wood and Raoul Pal do a deepdive on Polkadot was held on May 23rd. NOTE: This is part of the treasury backed partnership to educate.
• Unique hosted live chats on all of their social networks to cheer for our boy Conor Daly's Indy 500 race on May 26 2024.

That is all for this week. If you enjoyed the newsletter, please share it. You can subscribe on Substack to receive an email when next week's edition is ready. And if you're participating in creator staking on Subsocial, you can interact to increase your rewards — perhaps a good two-for-one deal by providing feedback or comments.

• Awesome cover art created by Dodow.
• The White Rabbit won 5 DOT for the Wag Challenge on May 15th, the competition was to literally look for treasure and uncover the Easter eggs.