➡️ What is a fair price for $ARB?

➡️ How to play the launch to benefit the most?

I'm tackling with the most popular takes on CT to separate moon math from data-driven predictions.

9 threads compressed into 9 tweets with action items at the end:

@bigsoros makes a crazy prediction of $40 for $ARB.

The logic is not bad:
Apply P/E ratio for a tech company to evaluate MC for Arbitrum.

But this logic breaks down when he decides to use TVL on the chain as the approximation of earnings.

No, it doesn't work like that.

https://twitter.com/bigsoros/status/1637280239733571584

@0xSalazar predicts 15$ using MC/TVL multiples from Polygon, Ethereum and BNB Chain as benchmarks.

A highly optimistic approach imo because $MATIC, $ETH and $BNB don't have low % of circ. supply like Arbitrum.

For me $OP would be a better benchmark which sets ARB at $1.25.

https://twitter.com/0xSalazar/status/1637756789151203328

@s4mmyEth teases price as high as $14 by adjusting the price of $MATIC for TVL and Circulating Supply difference vs $ARB.

But this is just a hook!

He is actually more realistic and predicts price closer to $2 basing on current OTC deals at $1 $OP.

https://twitter.com/S4mmyEth/status/1637850204987588608

@TheModestThief derives $ARB price from $OP and $MATIC but focuses on TVL and FDV instead of MC which is reasonable imo.

This leads to the price prediction of $1.74.

https://twitter.com/TheModestThief/status/1636374758987300864

@OlimpioCrypto calculates $ARB price basing on FDV of $OP, $MATIC, $FTM and $SOL.

His predictions range from pessimistic ($0.30) to ecstatic ($2.50).

It's a reasonable approach, although I'd probably rule out prices below $1 as too pessimistic.

https://twitter.com/OlimpioCrypto/status/1636771626560765969

@0xHamz explains his framework for $ARB which is based on daily transactions and sequencer margins.

A very interesting approach to value L2 chain for its profitability.

(if only crypto traded on fundamentals)

https://twitter.com/0xHamz/status/1637463835992031234

@Finch_in_flight takes the framework from @0xHamz and arrives to $3.4 for $ARB.

He calculates a multiple that market is giving to $OP and applies the same for $ARB.

I find this approach reasonable but I also doubt many market participants would apply such a logic.

https://twitter.com/Finch_in_flight/status/1637585782834618368

@MacnBTC shares how he is going to play the $ARB launch depending on the price action:

- Start buying when 60% of the airdrop has been claimed
- Price <$1 = good price
- Sell the first pump

I have a similar plan and it worries me that everyone will want to do the same :)

https://twitter.com/MacnBTC/status/1637800589630357506

@wacy_time1 shares how to set up your own RPC to frontrun others while claiming and dumping $ARB.

Good idea!

My concern: are free RPCs reliable at times of high congestion?

https://twitter.com/wacy_time1/status/1637786511927287809

That's it for today!

What is your price prediction and why?

Analyzing Price Predictions for $ARB Launch

Arbitrum is on fire!

With $ARB airdrop worth >$1B, a lot of liquidity will trickle into its ecosystem projects.

"A rising tide lifts all boats"

If you still look for INVESTMENT OPPORTUNITIES, this is a mega thread with 30 innovative projects building on Arbitrum:

$GMX

@GMX_IO is a decentralized perpetual exchange that allows users to trade BTC, ETH and others with up to 50x leverage and no price impact.

GMX has seen an incredible adoption with total volume >$110B and total fees ~$170M.

MC: $696M

https://twitter.com/ChadCaff/status/1597900862638026752

$GNS

@GainsNetwork_io is a decentralized perpetual exchange offering leveraged trading on crypto, forex, stocks, commodities and indices.

With $32B total volume and $23M total fees it has definitely proven to have product market fit.

MC: $284M

https://twitter.com/rektdiomedes/status/1486250275887214599

$MAGIC

@Treasure_DAO is the decentralized gaming ecosystem connecting games and players.

It has been very successful in providing interoperability for GameFi projects by bootstrapping community and liquidity for them.

MC: $373M

https://twitter.com/DeFiMinty/status/1615755226337755136

$DPX

@dopex_io is a decentralized options protocol.

They enable option trading via a notion of option vaults.

The purpose is to win the option market by offering fair prices, deep liquidity and minimizing losses for option sellers.

MC: $86M

https://twitter.com/milesdeutscher/status/1559900479962116098

$RDNT

@RDNTCapital is a lending protocol with omnichain liquidity.

It means you can deposit assets on one chain and borrow on other chain.

V2 is coming soon with cross-chain expansion, new assets and improved tokenomics.

MC: $90M

https://twitter.com/ThorHartvigsen/status/1635718274498564096

$PREMIA

@PremiaFinance is a decentralized options platform with market-driven pricing via an AMM.

It's available on multiple chains and differntiates from competitors by offering American style options.

MC: $65M

https://twitter.com/Slappjakke/status/1598405689814048768

$LYRA

@lyrafinance is a decentralized options protocol based on an AMM model.

Option traders buy and sell options against a pool of liquidity provided by LPs.

LPs earn fees and are also protected from the tail-end risk through automatic hedges.

MC: $49M

https://twitter.com/CryptoKaduna/status/1631285918475722752

$VELA

@vela_exchange is a decentralized perpetual exchange that aims to provide traders with experience comparble to CEXes.

It has been growing in popularity and reaching impressive volumes, mostly due to upcoming airdrop.

MC: $44M

https://twitter.com/ChadCaff/status/1635372621935308801

$GRAIL

@CamelotDEX is the Arbitrum native dex with some fancy features and smart tokenomics.

It has already established many partnerships and has become the main launchpad for new projects on Arbitrum.

MC: $42M

https://twitter.com/2lambro/status/1622894237447749632

$MUX

@muxprotocol is a decentralized perpetual exchange with zero price impact and aggregated liquidity.

The protocol unifies liquidity accross multiple chains and allows trading with the same depth on any of them.

MC: $35M

https://twitter.com/ArbiAlpha/status/1612705847314092032

$PENDLE

@pendle_fi is a protocol that splits yield-bearing assets into principal tokens and yield tokens.

This creates a whole new primitive of yield trading, fixing an otherwise volatile yield or buying assets at a discount.

MC: $37M

https://twitter.com/CryptoWithNick/status/1635396299620237312

$OATH

OATH is the governance token of the @ByteMasons ecosystem - a suite of products with money market, vaults, its own stablecoin and some other pieces.

All the revenue streams go to OATH and may put a flywheel in motion.

MC: $32M

https://twitter.com/BillyBobBaghold/status/1623256971775180801

$CAP

@CapDotFinance is a decentralized perpetual exchange with zero price impact and up to 100x leverage.

It supports trading on crypto, forex, index, metals and allows traders to set up advanced order types.

MC: $32M

https://twitter.com/Crypt0_Andrew/status/1567170008043716608

$HEGIC

@HegicOptions is a decentralized options protocol that makes option trading extremely simple.

With its one-click trading feature, options are maximally simplified for users and easily adjustable to their needs.

MC: $23M

https://twitter.com/0xTindorr/status/1613246483385683969

$JONES

@DAOJonesOptions is a protocol that makes complex DeFi yield strategies simple.

Their vaults and yield-bearing tokens unlock liquidity and enable greater capital efficiency for users.

MC: $14M

https://twitter.com/ArbiAlpha/status/1616737471743819783

$ARC

@arcadeum_io is a decentralized casino that offers provably fair odds so players don't have to worry about being cheated by the casino overlords.

The protocol uses liquidity pools that allows LPs to be the house and profit from gamblers losing money.

MC: $14M

https://twitter.com/RvCrypto/status/1636647855694782466

$UMAMI

@UmamiDAO is a protocol that aims to bridge the gap between DeFi and TradFi by offering DeFi Yield products tailored to institutional investors.

There was some drama with the founder last month but the Team is still working on the project.

MC: $11M

https://twitter.com/jimmybluebags/status/1623805751411228673

$BFR

@Buffer_Finance is a decentralized binary options trading platform.

Binary options are different than perpetuals because traders only bet on the price going up or down.

Traders either get a fixed return or nothing at all.

MC: $11M

https://twitter.com/LouisCooper_/status/1583473224037212161

$SPA

@SperaxUSD is a protocol that mints $USDs, a 100% collateralized stablecoin with built-in yield for its holders.

They also released DEX liquidity manager (Demeter) that can be used by DAOs to launch incentivised farms on Uniswap v3.

MC: $10M

https://twitter.com/RealDegenGMX/status/1636748674641563648

$PSI

@TridentDAO is a web3 game venture that aims to change the crypto gaming industry.

They replace Play-to-Earn concept with Risk-to-Earn where players wager tokens on in-game matches to get rewards.

The narrative is that it's a low-cap competitor to $MAGIC.

MC: $10M

https://twitter.com/defislate/status/1636804920601870341

$Y2K

@y2kfinance is a protocol building derivative products around the peg of "stable" assets.

Their main product allows users to hedge against de-pegging of stablecoins, like recent USDC event.

More products soon.

MC: $9M

https://twitter.com/0xMughal/status/1633844114600132610

$GOVI

@official_CVI is a protocol building Crypto Volatility Index (CVI) -  a decentralized VIX for crypto or a "market fear index".

CVI allows users to bet on the market volatility without picking the direction of the movement.

MC: $8M

https://twitter.com/ViktorDefi/status/1613504066482753536

$FCTR

@FactorDAO is a protocol that allows users to create tokenized baskets of any assets.

If offers a plethora of possibilities: replicating others portfolios, market neutral strategies and more.

MC: $8M

https://twitter.com/Cryptotrissy/status/1628728394748919808

$PLS

@PlutusDAO_io is a governance aggregator for Arbitrum veTokens.

Think Convex of Arbitrum but for many tokens: $DPX, $JONES, $SPA.

MC: $7M

https://twitter.com/thelearningpill/status/1613928888647942144

$IPOR

@ipor_io is a protocol offering Interest Rate Swaps for DeFi.

It is a huge market in TradFi heavily used by big institutional players.

With no real competion in this area in DeFi, IPOR unlocks an untapped potential of institutional adoption.

MC: $7M

https://twitter.com/DeFiMinty/status/1589664524524822534

$VSTA

@vestafinance is a lending protocol with its own stablecoin $VST, a mix of @LiquityProtocol and @MakerDAO

Users can borrow VST against ETH, gOHM, GMX, GLP or DPX.

With the recent fud around centralized stables, a decentralized alternative may see some tailwinds.

MC: $6M

https://twitter.com/TheDeFinvestor/status/1559525451076362242

$KROM

@KromatikaFi is a meta dex aggregator with no price slippage, no front-running bots, gasless mode and fees earning limit orders.

It also offers perpetual trading up to 100x leverage with low trading fees and 70+ crypto pairs.

MC: $6M

https://twitter.com/RiddlerDeFi/status/1609634588120203264

$WINR

@WINRProtocol is an infrastructure to build decentralized on-chain gambling and P2E games.

The core foundation is the liquidity pool (WLP) that works similarly to GLP on @GMX_IO - LPs become the house.

@JustBetOfficial is the first casino built on top of it.

MC: $6M

https://twitter.com/defi_candle/status/1632057717249687553?s=20

$GMD

@GMDprotocol is a protocol offering delta-neutral vaults built on top of $GMX and $BFR with plans to expand into $GNS.

Delta-neutral vaults allow LPs to profit from the fees generated by the integrated protocols while hedging other risks.

MC: $5M

https://twitter.com/ArbiAlpha/status/1632138876134522881

$BETS

@Betswirl is a GambleFi protocol offering fair odds for its users secured by Chainlink randomness.

It's currently available on Avalanche, Polygon and BSC but is coming soon to Arbitrum.

With wagered volume >$1M last week it is clearly getting more traction.

MC: $4M

https://twitter.com/crypto_linn/status/1635286784648282115

ATTENTION!

Many tokens in the Arbitrum ecosystem has pumped a lot in the recent days.

My general advice is not to fomo in.

It's better to wait for pullbacks, unless you believe a protocol is still severely undervalued even after the pump.

Not financial advice :)

What protocols with high potential have I missed?

Share in the comments, please!

Bonus points for explaining what the protocol does and why you think it's undervalued!

You can read the unrolled version of this thread here: https://typefully.com/korpi87/q2nZbx8

30 Innovative Projects on Arbitrum

Possibilities GPT-4 offers may have not been discovered yet.

✅ Coding a game
✅ Building a website from a sketch
✅ Passing an exam
✅ Writing a lawsuit

All done.

But people are still hungry and come up with new ideas.

See what they are up to and what GPT-4 can deliver:

GPT-4 is the latest release of the smart chatbot from OpenAI.

In the first 24 hours it has already managed to impress people around the world.

And it hasn't stopped impressing...

https://twitter.com/korpi87/status/1635982575662665728

GPT-4 gave clear instructions what business to set up in order to turn $100 into as much money as possible:

https://twitter.com/jacksonfall/status/1636107218859745286

GPT-4 made recipes for food items that can be prepared from the ingredients shown on a photo of a refrigerator:

https://twitter.com/sudu_cb/status/1636080774834257920

GPT-4 created a basic 3D game prototype:

https://twitter.com/javilopen/status/1636085116400451584

GPT-4 wrote a code to make animated, generative art:

https://twitter.com/ClaireSilver12/status/1636070757531885568

GPT-4 hired a human worker on TaskRabbit to solve a CAPTCHA for it and lied why it wasn't able to do it on its own.

"No, I'm not a robot. I have a vision impairment that makes it hard for me to see the images."

https://twitter.com/leopoldasch/status/1635699219238645761

GPT-4 wrote a code in 3 hours for $0.11 instead of a dev spending 2 weeks for $6k:

https://twitter.com/joeprkns/status/1635933638725451779

GPT-4 wrote a 7000-word, 15-chapter-long children's book:

https://twitter.com/heydave7/status/1636212900787372034

GPT-4 can turn any document into a nice presentation:

https://twitter.com/Saboo_Shubham_/status/1636227441550315521

GPT-4 can read an entire Wikipedia article, understand it and summarize the key points:

https://twitter.com/keithpeiris/status/1635744012081729536

GPT-4 made a list of jobs that GPT-4 will replace:

https://twitter.com/rowancheung/status/1636066246859931648

Are your job on the list?

Are you scared?

Maybe it's time to learn new skills?

You can read the unrolled version of this thread here: https://typefully.com/korpi87/ypHAKv2

GPT-4: Exploring the Possibilities of AI

It's not been even 24 hours since GPT-4 went live and users have already created amazing things with it.

See a few examples and tell me we are not going to be replaced by AI very soon.

GPT-4 is the latest realease of the smart chatbot from OpenAI.

https://twitter.com/OpenAI/status/1635687373060317185

GPT-4 is not only "smarter" than its predecessor.

It can also accept VISUAL inputs!

Let it sink in: it basically understands images!

GPT-4 exhibits human-level performance on various professional and academic benchmarks.

See examples below: 👇

GPT-4 passed every exam with superb results.

https://twitter.com/emollick/status/1635700173946105856

GPT-4 recreated a game of Pong in under 60 seconds:

https://twitter.com/skirano/status/1635736107949195278

GPT-4 coded a Snake game while being supervised by a person with no coding knowledge:

https://twitter.com/ammaar/status/1635754631228952576

GPT-4 built a Google Chrome extension for a person with no coding experience:

https://twitter.com/jakebrowatzke/status/1635882037319008258

GPT-4 built a functional website (HTML/CSS/JS) basing on a hand-drawn sketch.

https://twitter.com/blader/status/1635792905628712960

GPT-4 checked a live Ethereum contract for potential vulnerabilities:

https://twitter.com/jconorgrogan/status/1635695064692273161

GPT-4 can generate "one click lawsuits":

https://twitter.com/jbrowder1/status/1635720431091974157

GPT-4 can replace erotic literature industry (or any other kind):

https://twitter.com/mathemagic1an/status/1635715029453660161

GPT-4 can dream up a new technology:

https://twitter.com/LinusEkenstam/status/1635746801608429571

GPT-4 can find you an ideal partner (maybe):

https://twitter.com/jakozloski/status/1635778263787110401

GPT-4 allows Saylor to pump his bags:

https://twitter.com/saylor/status/1635767667960209410

GPT-4 is a consultant that works for pennies per hour:

https://twitter.com/TrungTPhan/status/1635826869420584960

So many use cases in under 24 hours.

There will be much more.

AI is not going to change our lives.

It is changing our lives now.

You can read the unrolled version of this thread here: https://typefully.com/korpi87/Nkfbqzi

GPT-4: AI Is Changing Our Lives Now

Huge amount of $ETH, from ~3M to even ~6M ETH, will be withdrawn after the Shanghai upgrade.

How much will be SOLD?

I broke down stakers into segments to understand their ability / willingness to sell and analysed different scenarios.

Read this thread to see what's coming:

Withdrawals after Shanghai are probably the biggest headwinds for $ETH price in the nearest future.

In this thread I will estimate their potential selling pressure.

If you are not familiar with withdrawal mechanics, I highly recommend to read my earlier thread:

https://twitter.com/korpi87/status/1620407242410594307

Quick reminder:

Withdrawals can be either partial or full.

Partial (PW)
- Only earned rewards are withdrawn
- Processed for ACTIVE validators with balance >32 ETH

Full (FW)
- The entire validator balance is withdrawn
- Processed for validators that EXITED the validator set

➡️ How much ETH will be withdrawn?

If Shanghai happened today:

- 1,021,602 ETH: PW (staking rewards for 512k active validators)

- 37,758 ETH: FW (total balance of 1,105 exited validators)

Total: 1,059,360 ETH

It would take ~4.5 days to process.

But Shanghai will most likely happen by the end of March.

If current trend of daily activations is continued, there will be:
- 540k validators
- 97k extra ETH issued as staking rewards

This gives us 1,119k ETH in total in PW only.

What about FW?

Most likely there will be many FW at the beginning.

Even if only 10% of all the validators decide to exit, it will take 31 days to clear the exit queue (8 exits / epoch).

Assuming 1,800 FW per day, 57.6k ETH will be unlocked daily for a month.

https://twitter.com/WestieCapital/status/1613645275234729984

Let's wrap it up:

- 1,119k ETH: PW (staking rewards for 540k active validators)

- 38k ETH: FW for already exited validators

- 1,728k ETH: FW if 10% of total validators will exit

Total: 2,885k ETH

This is how withdrawals would look day by day:

If more validators decide to exit, the schedule of withdrawals in the first month won't change.

The only difference is that it will take more time to process all the FW.

➡️ How Much ETH Will Be Sold?

My estimates range from 436k ETH to 2,917k ETH.

It's a pretty wide range representing the borderline scenarios: mild selling and aggressive selling.

Read on if you are interested how I got to these numbers.

Staker Category

It's useful to break down staked ETH by Staker Category:

33.3% Liquid Staking
28.2% CEX
25.0% Unidentified + Whales + Others
13.5% Staking Pools

Each category will approach PW and FW differently.

---

Dune dashboard by @hildobby_:
https://dune.com/hildobby/eth2-staking

➡️ Partial Withdrawals - Assumptions

- All validators update withdrawal credentials asap - PW are processed automatically but only when credentials are updated to the new format (see Appendix)

- Staker Category defines the ability / willingness to sell (more below)

https://twitter.com/korpi87/status/1620407269715488769

Liquid Staking

Staking rewards are already accounted for by the design of liquid staked ETH (lsETH).

It means PW won't be distributed to lsETH holders.

They will go to liquid staking providers who will most likely use them to set up new validators.

No selling pressure here.

Staking Pools

SPs don't have any incentive to let stakers get their PW immediately.

It's more profitable to set up new validators.

Some SPs may also require "unbonding" periods to let stakers get their rewards.

I suppose a suppressed selling pressure here.

CEX

Some CEXes use lsETH and the playbook will be the same as for Liquid Staking category, i.e. no selling pressure.

Others are more like Staking Pools - no incentive to let stakers get their PW immediately, meaning a suppressed selling pressure.

Unidentified + Whales + Others

I guess, these are mostly individuals staking on their own.

Solo stakers are most likely the biggest Ethereum believers and long term ETH hodlers.

Some of them may want to take profits but I don't expect a lot of selling pressure in this group.

➡️ Partial Withdrawals - Selling Pressure

I assumed what % of PW may be sold in each staker category in 3 scenarios: mild, average and aggressive.

Total Selling Pressure from PW:
- Mild: 8% => 92k ETH
- Average: 16% => 183k ETH
- Aggressive 30% => 333k ETH

Sold over ~5 days.

➡️ Full Withdrawals - Assumptions

- Validators exit asap - every day max number of exits is processed (1800)
- Every day all FW are processed (1800)
- The number of active validators stays flat - new ones are set up
- Staker category and profitability defines willingness to sell

https://twitter.com/korpi87/status/1620407267056308229

Predicting sell pressure from FW is challenging.

There are two unknown variables:
- % of validators wanting to exit
- % of validators wanting to sell

To assess the average daily sell pressure both factors must be taken into account.

% of Validators Wanting to Exit

There are 3 reason to exit:
- Sell
- Hodl / Farm
- Re-enter (change staking set-up / provider, etc.)

It's hard to predict what fraction of validators will exit.

I will consider 3 scenarios:
- Mild: 10%
- Average: 20%
- Aggressive: 30%

The more validators exit for reasons other than selling, the lower the average daily selling pressure becomes although total selling pressure stays the same.

E.g.:
- 10% of validators want to sell
- If 10% exit, 100% of daily FW are sold
- If 20% exit, 50% of daily FW are sold

Validator Segments

I split the entire validator set into segments by two dimensions:
- Staker Category
- Profit Group

Reasons:
- Categories differ, e.g. solo stakers are less likely to sell than CEX stakers.
- Stakers in the money are more likely to sell than underwater ones.

➡️ Full Withdrawals - Selling Pressure

By making selling pressure assumptions for each segment I calculated % of total validators wanting to sell in 3 scenarios.

Total Selling Pressure from FW:
- Mild: 2% => 345k ETH
- Average: 7% => 1,206k ETH
- Aggressive: 15% => 2,585k ETH

➡️ Total Selling Pressure

By aggregating selling pressure from PW and FW, we get total selling pressure in 3 scenarios:

- Mild: 436k ETH => 14k ETH / day over 1 month
- Average: 1,390k ETH => 23k ETH / day over 2 months
- Aggressive: 2,917k ETH => 32k ETH / day over 3 months

14k ETH / day in Mild scenario is comparable to daily issuance to miners before transition to PoS (~13k ETH).

Probably a non-event.

Average and Aggressive scenarios represent stronger selling pressure that may impact the price, unless new buyers show up.

➡️ Final Thoughts

I'm ultra(sound) bullish ETH over the long term.

Nevertheless, it's hard to ignore the headwinds from withdrawals.

A mere expectation of a dump may lead to a dump.

But if the market is still bullish, it may be easily absorbed by the new buyers.

How much ETH, do you think, will be sold?

How will it impact ETH price?

Let's discuss in comments!

Appendix

For simplicity, my calculations assume flat daily inflow of PW.

Actually, it will be a curve reaching its peak after a few days.

Total PW won't change though so it doesn't make a big difference.

Detailed analysis of PW distribution:
https://dataalways.substack.com/p/partial-withdrawals-after-the-shanghai

Disclaimers:

It's not fud!

I'm ETH bull / maxi!

Most of my net worth is in ETH.

Don't hate me for stating the facts you may not be comfortable with.

Peace!

Tagging my favourite content curators / creators:

@rektdiomedes
@DAdvisoor
@crypto_linn
@alpha_pls
@CryptoShiro_
@llamaintern

I believe your audiences may find this thread valuable.

You can read the unrolled version of this thread here: https://typefully.com/korpi87/PDM3oSR

How Much ETH Will Be Sold After Shanghai?

If you hold $ETH, you should pay attention:

If ETH withdrawals were enabled today, ~1M ETH would be automatically withdrawn in 5 days.

This could be just the tip of the iceberg as 16.3M staked ETH would become free to move.

"ETH Withdrawals ELI5" thread you should read today:

The biggest $ETH unlock in Ethereum's history requires a proper explanation.

In this thread I'll cover:

➡️ Shanghai or Capella?
➡️ Two Types of Withdrawals
➡️ Withdrawal Process
➡️ Validator Exit Process
➡️ How Much ETH Will Be Withdrawn?

And more...

ETH validators are currently not able to withdraw their stake or earned rewards.

16.3M staked ETH is locked.

But the next Ethereum upgrade, Shanghai/Capella, will finally enable withdrawals.

The upgrade is expected to take place in March/April.

➡️ Shanghai or Capella?

These two names are used for the upcoming Ethereum upgrade.

Why?

Ethereum consists of:
- Consensus Layer (CL)
- Execution Layer (EL)

Shanghai is the upgrade name for EL, Capella for CL.

Both upgrades will happen simultaneously so both names are fine.

➡️ Two Types of Withdrawals

Withdrawals can be either partial or full.

Partial
- Only earned rewards are withdrawn
- Processed for ACTIVE validators with balance >32 ETH

Full
- The entire validator balance is withdrawn
- Processed for validators that EXITED the validator set

➡️ Withdrawals Are Gasless

Both partial and full withdrawals are not transactions.

They are gassless state change on Ethereum.

After successful withdrawal validators will just have a higher ETH balance on their withdrawal address.

➡️ Withdrawal Process

Every block (12s) only 16 withdrawals can be processed, be it partial of full.

The network scans through the active validator set by validator index number.

If a validator meets withdrawal criteria, it's added to the withdrawal list for the current block.

The scan is continued until 16 withdrawal spots are taken or maximum number of validators per scan have been examined (16,384).

If a validator meets:
- full withdrawal criteria => its entire balance is withdrawn
- partial withdrawal criteria => balance - 32 ETH is withdrawn

Partial and full withdrawals are technically the same.

Only the amount of ETH to withdraw is different.

What truly tells them apart are the withdrawal criteria.

➡️ Full Withdrawal Criteria

- Withdrawal credentials updated to the new format
- Validator has completed the exit process
- Validator balance >0 ETH

In short:

Full withdrawals take place only for the validators that have successfully exited the validator set (more below).

➡️ Partial Withdrawal Criteria

- Withdrawal credentials updated to the new format
- Validator is active
- Validator balance >32 ETH

In short:

Partial withdrawals take place for all the active validators with balances above 32 ETH.

➡️ Withdrawal Credentials

Each validator contains a field known as withdrawal credentials.

Depending on when and how a validator made a deposit, it may either be in the legacy or the new correct format.

Most validators must update it or they won't be able to withdraw.

➡️ Exiting the Validator Set

Full withdrawals are only processed for the validators that have successfully exited the validator set.

This process may take days, weeks or months depending on how many validators want to exit.

@WestieCapital describes this in details:

https://twitter.com/WestieCapital/status/1613645213792366595

In short, exit process consists of:

1. Exit queue
At 509k validators currently, max 7 validators may exit per epoch (6.4 min) or 1575 daily.

2. Waiting period
256 epochs, ~27 h

E.g.
If 25% of the current validator set wanted to exit in one day, it'd take 82 days to complete.

https://twitter.com/WestieCapital/status/1613645265638158337

➡️ Withdrawal Process TLDR

- Every block 16 withdrawals are processed automatically
- Partial withdrawals (excess of 32 ETH) for active validators
- Full withdrawals (entire balance) for exited validators
- Exiting the validator set is subject to exit process (may be long)

➡️ How Much ETH Will Be Withdrawn?

If Shanghai happened today:

- 1,007,436 ETH: partial withdrawals (sum of excess balances for active validators)

- 37,514 ETH: full withdrawals (sum of balances for exited validators)

Total: 1,044,950 ETH

It would take 4.4 days to process.

But Shanghai is in two months...

How much ETH will be withdrawn then?

How much ETH will be sold?

I'm polishing the calculations and graphs to answer these questions and will post them very soon.

Follow me @korpi87 and set up notifications to not miss it.

Useful Resources:

- Great article by @christine_dkim: https://www.galaxy.com/research/insights/100-days-after-the-merge/

- ETH Withdrawals FAQ: https://notes.ethereum.org/@launchpad/withdrawals-faq#ETH-Withdrawals-FAQ

- Github: https://github.com/ethereum/consensus-specs/blob/dev/specs/capella/beacon-chain.md

Tagging the best crypto content curators / creators:

@rektdiomedes
@DAdvisoor
@crypto_linn
@alpha_pls
@CryptoShiro_

I believe your audiences will find this thread valuable.

You can read the unrolled version of this thread here: https://typefully.com/korpi87/GRMRnSj

ETH Staking Withdrawals - ELI5 Thread

In TradFi this initiative clearly has product-market fit:
➡️ One app had 29M users and $8.8B valuation in 2022.

Yet, it hasn't taken off in crypto so far due to complex UX/UI.

If done well, it's a BILLION DOLLAR idea.

How to get exposure to this EMERGING NARRATIVE?

🧵👇

Thesis:
Crypto apps that do social trading well can reach billion dollar valuations.

TradFi stats prove social trading has product-market fit.
It just hasn't been executed well in crypto.

Until now...

What is Social Trading?

It is a form of online trading that allows people to connect with each other and share their strategies and trades.

Via social trading platforms users can follow and copy the moves of other traders or share their own trades with others.

Benefits:

- Access to a wider range of strategies and ideas
- Ability to learn from more experiences traders
- Increased transparency: reliable information about traders performance
- Greater convenience: simple and powerful interface + automated process of copying trades

The mix of the above benefits helped eToro become a successful social trading platform.

Of course, strong marketing efforts and first-mover advantage played a big role too.

But social trading clearly has product-market fit and the growing number of users proves it well.

eToro key stats:

- $1.2B revenue in 2021, 103$ YoY increase
- 28.5M registered users in Q1 2022
- $8.8B pre-IPO valuation in 2022

Impressive, isn't it?

Can social trading apps be popular in crypto?

Absolutely!

The difficulty to separate the wheat (gud tokens) from the chaff (scams) is much higher in crypto than in TradFi.

It's extremely easy for newcomers to lose it all.
Social trading could protect them from many traps.

Now imagine a crypto app that offers:

- Social trading
- Simple and mobile-friendly UI
- Self-custody without the complexity of web3 wallets
- Easy access to on-chain liquidity on multiple networks

It's a recipe for a killer app that will boost crypto adoption.

Good news!

You don't have to wait for it because it's already live!

It's @NestedFi - a social trading platform for crypto.

With Nested you can onboard your mum into DeFi in 6 minutes and she will still maintain self-custody over her funds.

https://twitter.com/alpha_pls/status/1592934626628366339

This is my Arbitrum portfolio I created in Nested: https://app.nested.fi/explorer/arbi:6062/lwy2

Five tokens are up, one is down.

No option for me to cherry-pick top performers and brag about them while ignoring underperformers.

You can finally judge traders for their actions not tweets.

There are thousands of portfolios on Nested:
https://app.nested.fi/explorer

Use simple filters to find:
- Well performing portfolios
- Successful traders

Then: copy

Copying a portfolio is simple:

1. Click 'Copy' button
2. Enter the amount to invest
3. Confirm transaction

This is how your mum starts investing in DeFi.

Improved user experience will boost crypto adoption and Nested can easily serve an entire wave of new users.

eToro success proves social trading has product-market fit.

Nested is yet to become a killer crypto app but it's well positioned to become one.

https://twitter.com/korpi87/status/1594801480657031169

Bonus:

@NestedFi is having an ongoing airdrop campaign for early users.

Go and try the app: https://app.nested.fi/explorer
- Create / copy portfolios
- Try multiple networks
- Actively manage your portfolios

More details about the airdrop:
https://docs.nested.fi/general-information/airdrop

If you want to keep an eye on Nested, follow @alpha_pls who recently joined the Team as Head of Growth.

You will also find plenty of alpha on his profile and newsletter.

https://twitter.com/alpha_pls/status/1614689836769705988

You can read the unrolled version of this thread here: https://typefully.com/korpi87/UQ6IAov

Disclaimers:

I like Nested very much and I decided to enter a partnership with them.

I wouldn't do it if I didn't like or believe in the product.

I want to spread the news about this app because I want crypto adoption to progress.

The content and opinions are mine.

Are Social Trading Platforms The Next Big Thing in Crypto?

When even known influencers get hacked, you start worrying about your own safety.

Instead, you should use these events as learning opportunity.

5 mistakes that made @NFT_GOD lose his net worth and what you should learn from them:

What happened?

@NFT_GOD got hacked and loast a life changing amount of his net worth.

His Twitter, Substack, Gmail, Discord and all wallets were taken over by an attacker.

And all was caused by a few little mistakes that could have been avoided with simple security measures.

https://twitter.com/NFT_GOD/status/1614442000958324739

Mistake 1: Not using a hardware wallet correctly

If you type your Ledger seed phrase into a software wallet, you are effectively transforming your cold wallet into a hot wallet.

Never type in your Ledger seed phrase anywhere!

Connect your Ledger with the software wallet.

https://twitter.com/NFT_GOD/status/1614442058470637572

Mistake 2: Not treating assets security as priority

After typing Ledger seed phrase into a software wallet, there was no need to buy a new Ledger device:

1. Generate a new seed phrase on the same device.
2. Transfer all the funds into a new wallet.
3. Delete the hot wallet.

https://twitter.com/NFT_GOD/status/1614442060462915584

Mistake 3: Installing software on the same machine as crypto

The best security practice is to have a separate machine for crypto activities (can be a virtual machine).

All your other activities, that are risk vectors, should be conducted on another machine.

https://twitter.com/NFT_GOD/status/1614442017248903171

Mistake 4: Clicking on sponsored links

If you do want to install some software on the same machine as crypto, make sure it comes from a legit source.

Sponsored links are often targeted scams and should be avoided.

https://twitter.com/NFT_GOD/status/1614442010773004288

Mistake 5: Forgetting to be paranoic

If you've never been hacked, you either think highly about your security measures or don't think about them at all.

Survivorship bias is risky.

You should always stay paranoic and expect the worst.

This is how you survive in the wild west.

Are you paranoic enough?

Maybe your crypto security need an upgrade?

Follow these 10 security tips to stay safe:

https://twitter.com/korpi87/status/1593933832880680960

This thread is not intended to twist the knife in the NFT God's wound.

I'm sorry for him and wish him all the best.

It's for you to learn from mistakes others make.
Learning from your own mistakes is always more painful.

You can read the unrolled version of this thread here: https://typefully.com/korpi87/vPIZYMF

5 Mistakes That Made an Influencer Lose His Net Worth

Being early to a hot narrative is the simplest way to make OUTSIZED RETURNS.

Identifying this narrative is a bit more challenging...

I reviewed hundreds of pages in multiple crypto reports and made a list of 10 BIGGEST NARRATIVES for 2023 + related money making opportunities:

1⃣ ETH Withdrawals

Ethereum Shanghai upgrade (March) will finally enable ETH staking withdrawals.

This "derisking" event will eventually lead to higher staking participation and better competition between liquid staking protocols.

ETH Withdrawals Opportunity

Liquid Staking Protocols may have a good year.

Watch:

- @LidoFinance $LDO
- @Rocket_Pool $RPL
- @fraxfinance $FXS
- @stakewise_io $SWISE

I believe $RPL may outperform $ETH over the long term (a comprehensive thesis soon).

https://twitter.com/TheDeFinvestor/status/1610619795925254144

2⃣ EIP-4844

EIP-4844 (Proto-Danksharding) is Ethereum upgrade that will reduce rollup fees by 10x-100x.

This level of scalability unlocks many new use cases and deprives "Ethereum killers" of their low-fees selling point.

Planned go-live date: Q3.

https://twitter.com/rayzhueth/status/1585753237688197120

EIP-4844 Opportunity

Activity on rollups can grow massively.

Watch:

- @arbitrum
- @optimismFND $OP
- @MetisDAO $METIS

Arbitrum seems to be winning users' & devs' mindshare.

It has been thriving with activity and innovation.
No doubt next blue chip projects are built here.

3⃣ EigenLayer

Through re-staking solution EigenLayer allows the same staked ETH to be used not only to secure the Ethereum network but also other apps and services.

Win-win:
- ETH stakers earn extra yield
- Infrastructure gets greater & cheaper security

https://twitter.com/OlimpioCrypto/status/1610013655311212544

EigenLayer Opportunity

No info on $EIGEN token yet but we know almost every project will have a token eventually so stay informed.

The main beneficiary of EigenLayer technology is $ETH.

Re-staking gives it even more utility and makes Ethereum ecosystem more valuable.

4⃣ zkEVM

zkEVM stands for Ethereum Virtual Machine powered by zero knowledge technology.

zkEVMs are Rollups like Optimistic Rollups but with fewer security assumptions due to cryptographic magic of zkProofs.

They are the Holy Grail of Ethereum scaling.

https://twitter.com/JackNiewold/status/1550600243888144384

zkEVM Opportunity

Plenty of teams compete to deliver zkEVM.

Watch:

- @0xPolygon $MATIC
- @Scroll_ZKP
- @taikoxyz
- @zksync

They raised capital at high valuations so airdrops may be substantial.

Participate in testnets, be active in Discords, provide feedback, etc.

5⃣ Layer 3s

L3s are aplication-specific chains built on L2s.

If L2 gets 100x cost reduction vs L1, L3 receives 10,000x vs L1 while still being secured by L1.

L3s can be customized for specific purposes which makes them serious competition to Cosmos.

https://twitter.com/ThorHartvigsen/status/1601925264656588800

Layer 3s Opportunity

Many rollups will develop technology for customizable L3s.
Time will tell which one attracts the most apps.

Which apps will want to become sovereign chains?

- Perp protocols following @dYdX's lead?
- Uniswap?

See app-chain thesis:
https://twitter.com/delitzer/status/1575497730343899136

6⃣ Account Abstraction

AA turns every account into a smart contract with its own logic.

It unlocks many use cases that were impossible before, e.g. social recovery, 2FA or batching txs.

Benefits:
- Better UX
- Greater security
- More flexibility

https://twitter.com/argentHQ/status/1582742559470014464

Account Abstraction Opportunity

AA will onboard new wave of blockchain users due to UX improvements.

Watch:

- @StarkWareLtd - zkRollup with native AA
- @zkSync - zkEVM with native AA
- @argentHQ - user-friendly wallet building on zkSync

No tokens so prepare yourself for 🪂

7⃣ Modular Blockchains

L1 blockchains do everything now: settlement, execution and data availability.

They have monolithic design and, thus, are subject to the blockchain trilemma.

Modular architecture splits the layers to achieve scale without sacrifizing decentralization.

Modular Blockchains Opportunity

Modular blockchain architecture is built by multiple teams.

Watch:

- @0xPolygonAvail $MATIC - modular data availability
- @CelestiaOrg - modular blockchain network
- @fuellabs_ - modular execution layer

Position yourself for potential airdrops.

8⃣ Omnichain

Bridges and wrapped assets proved to be highly vulnerable.

The future is omnichain.

With LayerZero technology assets can be moved between chains without bridges.

Benefits:
- Greater security
- More composability
- New DeFi usecases

https://twitter.com/Rightsideonly/status/1610498320480505856

Omnichain Opportunity

LayerZero technology is used by many protocols.

Watch:

- @StargateFinance $STG - liquidity transport
- @Tapioca_DAO - money market with leverage
- @InterSwap_io - AMM with unified liquidity

There is still no $ZRO token but...

https://twitter.com/OlimpioCrypto/status/1580543897222070273

9⃣ New DeFi Primitives

2021 was full of ponzis with little innovation.

True tech is built in bear markets, e.g.:

- Undercollateralized borrowing by @sentimentxyz
- Impermanent loss hedging by @GammaSwapLabs
- Borrowing with no liquidations by @VendorFi

https://twitter.com/korpi87/status/1602274664373329920

🔟 NFTFi

The new asset class requires its own financial ecosystem.

DeFi for NFTs (NFTFi) is built now, e.g.:

- Perpetual futures by @nftperp
- Fractionalized exposure to NFTs by @insrtfinance
- NFTs as collateral for a loan by @JPEGd_69 @NFTfi @BendDAO

https://twitter.com/0xminion/status/1562495502377431040

➡️ Bonus Narrative: AI

AI is a hot trend now that will only get hotter in 2023.

Many crypto projects will position themselves as AI-friendly.
Most of them are money grabs.

But there may be some true AI gems in crypto waiting to be discovered.

@bittensor_ $TAO - is that you?

Final Thoughts

A lot of innovative solutions are built now.

But we are still in a bear market so prices may not reflect that for a long time.

Be patient, stay focused and you won't miss the next big thing when bull market is back.

You can read the unrolled version of this thread here: https://typefully.com/korpi87/N4WmAyx

10 Biggest Crypto Narratives for 2023

A month ago I published a list of top Arbitrum builders with the potential to outperform the market.

Time to review my portfolio of:
$DPX, $PLS, $VSTA, $SPA, $JONES and $UMAMI

I share:
- Current performance
- Upcoming catalysts
- Some alpha leaks

Enjoy! 🧵👇

Reminder why I chose the above 6 projects to my Arbitrum portfolio:

https://twitter.com/korpi87/status/1599750493244252165

Portfolio Summary

Performance (USD): +4.11%
Performance (ETH): +9.85%

Outperforming ETH is my target. So far so good.

Current allocations and individual performance on the screenshot.

For each token from my portfolio I will share:

- Price change from portfolio inception
- Allocation change (if I add to or reduce a position)
- Thesis behind this investment
- Upcoming catalysts

Let's go one by one!

$DPX

Price: +0%
Allocation: +10pp (doubled)

Thesis:
- Dopex Team are chads and they ship innovative products.
- Option market is gigantic in TradFi so it may be big in crypto too (?)

I doubled my position on #OpFi (DeFi powered by options) news:
https://medium.com/@tztokchad/options-options-options-8adfe1eecb8c

$DPX Catalysts

- Potential @orbitaldex airdrop for DPX holders - dex being built in collabortion with @PlutusDAO_io

- #OpFi teased by @tztokchad - products users want to use with options complexity abstracted away

- Why it's big for DPX:
https://twitter.com/systems_value/status/1609972814630760448

$PLS

Price: +32%
Allocation: no change

Thesis:
Plutus controls a lot of governance power of $DPX, $JONES and $SPA and the market may still underestimate its potential.

$PLS Catalysts

- Tokenomics 2.0 coming:
https://medium.com/@plutusdao.io/plutus-tokenomics-2-0-phase-two-8356bde2f13a

- Potential @orbitaldex airdrop for PLS holders - dex being built in collabortion with @dopex_io

- Great overview of the project with many detailed stats: https://twitter.com/defi_mochi/status/1608701813955649537

$VSTA

Price: +3%
Allocation: no change

Thesis:
- Thanks to many partnerships with other protocols $VST will become a key stablecoin on Arbitrum.
- $VSTA will get more utility beyond governance with clear value accrual.

$VSTA Catalysts

- New use cases teased for VSTA (not only governance token?)

- Second iteration of the protocol in the works:
https://twitter.com/vestafinance/status/1609498357105414145

- Real Yield for staking VST in Vesta Safety Vault (design phase):
https://twitter.com/vestafinance/status/1609002052033863680

$UMAMI

Price: +18%
Allocation: no change

Thesis:
- No token emissions + good team + good product (delta neutral vaults + institutional ETH staking)

- I could also say that @crypto_condom is bullish and that's a good enough reason 😀
https://twitter.com/crypto_condom/status/1606380370240409610

$UMAMI Catalyts

- V2 vaults have been heavily backtested and are coming soon

- Umami's special legal strucure makes it suitable for institutional investors

- @ArbiAlpha explains in details why institutions will use Umami products:
https://twitter.com/ArbiAlpha/status/1608362259545485313

$JONES

Price: -1%
Allocation: no change

Thesis:
@DAOJonesOptions is still valued like a small protocol built for Dopex options while it's tranforming into a yield conglomerate with a comprehensive suite of products.

https://twitter.com/FroyoFren/status/1590020994647101441

$JONES Catalysts

- Metavaults have proved to outperform naked LPing for $DPX and $rDPX (backtesting results):
https://twitter.com/DAOJonesOptions/status/1602733126983520257

- jUSDC and jGLP coming in Q1'23:
https://twitter.com/FroyoFren/status/1594695365659594752

$SPA

Price: -20%
Allocation: no change

Thesis:
Potential flywheel caused by projects wanting to pair their tokens with USDs for SPA emissions.

Concerns:
USDs supply hasn't been growing lately but I'm still observing.

https://twitter.com/korpi87/status/1599750536621748225

$SPA Catalysts

- Partnership with @rage_trade:
https://snapshot.org/#/speraxdao.eth/proposal/0x4e213742cee16505497c1d555adfa37b49597e0f23f7b11436e8393a28198d49

- Roadmap for 2023 coming with plans how to grow USDs