⚡Could 2024 be the Year of Modular Blockchains?
Plus tokenizing the world, Arbitrum hits a milestone, and more.
The Dynamo DeFi newsletter covers trends, on-chain analysis and tools in crypto each week. Be sure to also check out my YouTube for more regular content.
📈Trends and Narratives
Could 2024 be the Year of Modular Blockchains?
Every once in awhile, a new crypto ecosystem takes off that’s fundamentally unlike previous ecosystems:
DeFi in 2020
NFTs in 2021
A case can be made that the infrastructure is rapidly falling into place for something similar to occur with modular blockchains. In a nutshell, modular blockchains are customized chains that select different blockchain components like legos to meet their needs:
Settlement
Data availability
Execution environment
Since these modular blockchains are highly customized, they’re ideal for app-chains and smart contract chains that are targeted towards a specific purpose. In the past, launching a customized chain was a massive undertaking; however, new rollup-as-a-service solutions have made it as simple as clicking a few buttons.
With this infrastructure improvement, dozens, if not hundreds, of modular blockchains could launch this year. One major beneficiary of this expansion is Celestia, a data availability layer built on Cosmos. Dan Smith from Blockworks Research outlines what the future of Celestia could look like:
Another important piece of infrastructure for the modular expansion is Dymension. Dymension is seeking to create an IBC-enabled standard for rollups that developers can use to deploy a custom rollup in just a few clicks. In this interview with The Rollup, the Dymension founder talked about how Dymension fits into the modular ecosystem:
Tokenize the World
The Bitcoin ETFs are live. And key figures on Wall Street seem to be taking a deeper interest in crypto.
On the interview circuit this week, BlackRock CEO Larry Fink repeatedly extolled other utilities of cryptocurrency and tokenization. In one interview, he talked about how in the future all financial assets will be tokenized and that this global ledger of asset ownership could be used for things like shareholder voting:
While people in the crypto community have been talking about “hyper tokenization” for years, it’s remarkable to see the CEO of the world’s largest asset manager talking about it now.
Note that it remains to be seen how, if at all, Wall Street’s plans for tokenization will involve public blockchains. However, more tokenized assets increases adoption of crypto and legitimizes the asset class.
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🔢On-Chain Analysis
Arbitrum Breaks its 2021 TVL All-time High
This week, Arbitrum broke its long-standing TVL all-time high. Arbitrum’s previous record was in November 2021. Following the ARB airdrop in 2023, Arbitrum narrowly fell shy of breaking that record. Now, over 2 years later, it finally broke that record, making it one of the only major chains to break its TVL record from the 2021 bull run.
This TVL increase was driven in part by bridge inflows. Over the past 7 days, Arbitrum has received over $175M of net bridge inflows.
Stablecoin Transfer Volume Hit 365 Day High
Stablecoin transfers are one of the best real-world uses of crypto and they’ve been on the rise. This week saw a new 1-year high for overall stablecoin transfer volume. This growth was driven mostly by Solana, which has been on an uptrend since early December.
🛠️Tool Spotlight
Track Celestia Usage with Celenium
Celestia is so unique among blockchains that applying normal metrics to it can be difficult. Nevertheless, it’s possible to directionally track usage through accounts, transactions, and blobs. Celenium is a developer-focused blockchain explorer for Celestia.
📅Key Events This Week
That’s all for this week. For more frequent content, follow me on Twitter and YouTube.
Until next time,
Patrick Scott
Dynamo DeFi