PumpFun Nears $100M Revenue

Optimism Disables Fraud Proofs | BTC Mining All-Time Low Profits

Marco Manoppo & Karon Pangestu
August 19, 2024

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Good Morning.

PumpFun revenue hits $100M as the market is trending down. Remember kids, the house always wins. Maybe CZ can save the market once he’s out next month. Maybe his release + the typical October rally will be the saving grace.

In Today's Email:

What Matters: Optimism Granite update 🔴
Product: Make Memecoins PvE Again 👑
Charts: Bitcoin mining & illicit onchain activity 📉

Narratives: TRON and TON.

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WHAT MATTERS

Optimism Reverts Permissionless Fraud Proofs

Today, @OPLabsPBC posted an upgrade proposal detailing findings from a recent series of community-driven audits on the Fault Proof System, including the plan to fix the bugs identified as part of the audits.
— Optimism (@Optimism)
9:35 PM • Aug 16, 2024

State of play: Two months after launching its permissionless fraud-proof system, Optimism has reverted to a permission system following community-driven audits that uncovered vulnerabilities.

OP Labs has proposed the Granite upgrade, including a hard fork on Optimism’s Layer-2 network.
Permissioned fraud proofs only trusted proposers can contest transactions, while permissionless fraud proofs allow all users to do so.
Permissionless fraud-proof allows Optimism to claim Stage 1 decentralization, as defined by Vitalik Buterin, requiring a functioning fraud-proof system with a multisig override for bugs.

The proposal explains the activation of the fallback system and details the identified security vulnerabilities.

Two high-severity vulnerabilities were identified, according to Optimism's ImmuneFi bounty scale. However, no user assets were ever at risk, and all issues are detectable by monitoring tools.
While the fallback mechanisms were audited, some fraud-proof system contracts were out of Optimism’s audit scope.
The proposal notes that these contracts fall into the liveness/reputational risk category, posing no risk to user funds, so a fixed review was not pursued.

What’s next: The proposal schedules the "Granite" upgrade, including an L2 hard fork, for September 10 at 16:00:01 UTC.

For builders and investors: Achieving true fraud-proofs for an L2 network is not an easy technical fit. This concept has been touted for years but even the leading L2s are not having a smooth sailing experience with it.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

PRODUCT OF THE WEEK

Dub: Make Memecoins PvE Again

to make memecoins PvE again, we need fresh users and fresh approaches
apeing memecoins with friends should be so easy that u can do it on the toilet
we’re glad to have @turnkeyhq and @sadbryce on our side as we hope to make a huge mobile push for the space via embedded wallets
— Dub 👑 (@dubdotsocial)
11:26 PM • Aug 18, 2024

John Wang announced his new project called Dub, a platform built on the Solana blockchain, aimed at empowering genuine traders, content creators, and participants in the memecoin ecosystem.

Dub emphasizes security and fairness, striving to prevent users from being exploited by bots or falling victim to rug pulls.
Dub presents itself as more than just a platform; it claims to be a revolution in how people engage with the memecoin ecosystem.
Dub has 14K users signed up and deposited according to Wang.

Other cool products:

Tarsier, a privacy-centric web3 chatting app.
Dapp Form, a feedback platform with rewards.
DePod, a Web3 based music distribution platform.
BitSoul, a De-Social product based on BRC-Soul Protocol.
DeceX, a decentralized and anonymous platform for discussions.

CHARTS OF THE WEEK

Bitcoin Mining Profitability Hits All-Time Low

Bitcoin Hashprice Index - Hashsrate Index

Credits to Hashrate Index for the original chart.

State of play: Mining profitability hit all-time lows as the hashrate surged in early August, According to JPMorgan.

According to Hashrate Index data, USD/PH/day reached ATL at ~$40K USD/PH/Day on Aug 5 (PH = Petahash).
The market cap of the 14 US-listed miners tracked by the bank fell 18% since July's end and now trades at 2X their proportional share of the four-year block reward.
US-listed miners' share of the Bitcoin hashrate rose for the fourth consecutive month to a record 26%.
The network hashrate rose by 5 EH/s (1%) to an average of 621 EH/s in early August, still 30 EH/s below pre-halving levels.
The hashprice, a mining profitability measure, is around 30% lower than in December 2022 and 40% below pre-halving levels.

Our take: Each halving cycle introduces a higher risk for Bitcoin miners. As BTC market cap gets larger, the probability of BTC price increasing exponentially gets lower.

Illicit On-Chain Activity Down Nearly 20% Since January

Cumulative inflows to legitimate,risky,and illicit services by year

Credits to Chainalysis for the original chart

State of play: Illicit on-chain activity is down nearly 20% year-to-date, but stolen funds and ransomware are on the rise, according to a Chainalysis report.

Aggregate illicit activity has dropped 19.6% year-to-date, from $20.9B to $16.7B.
The report noted that illicit activity has decreased, while inflows to legitimate services are at their highest since the 2021 bull market peak.
Stolen funds inflows nearly doubled from $857M to $1.58B, while ransomware inflows rose from $449.1M to $459.8M since January.
The average cryptocurrency stolen per heist has risen nearly 80% since January, partly due to Bitcoin's price increase, which accounted for 40% of the total heist transaction volume.
Despite the drop in overall illicit activity, 2024 is on track to be the highest-grossing year for ransomware payments, with inflows exceeding $459.8M.

Our take: We’ve been seeing an uptick of North Korea-related targeted attacks. Be careful.

QUICK BITES

Tether expands USDT to Aptos.
Donald Trump earned $7M+ from NFTs.
PumpFun nears $100M in cumulative revenue.
BlackRock ETFs surpasses Grayscale’s in assets.
Franklin Templeton files S-1 for 'Crypto Index ETF'.
Hashkey partners with Catizen to extend GameFi reach.
Optimism Foundation disables permissionless fraud proofs.
ASIC says it coordinated the removal of over 600 crypto scams.
Justin Sun bets on memecoins with a Tron-based token generator.
Nigeria Court freezes $38M of crypto sent to support protests in the country.

NOTEWORTHY READS & MEME

Safary’s read on growing wallets.
Maanav’s read on blockchains and the monopoly on truth.
Max Shannon’s read on Trump vs Harris — the implications for BTC.

Kamala made the catastrophic mistake of actually explaining what she plans to do. Crypto founders know you launch a token and vaguely hint at “future utility,” never ever explain what that future utility actually is. You don’t drop a detailed roadmap before you’re sure you’ve won
— Gwart (@GwartyGwart)
4:15 PM • Aug 18, 2024

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.