⚡The New Layer 1 Rotation
Plus DePIN, Solana on-chain activity 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
The New Layer 1 Rotation
In 2021, a common rotation was named “SoLunAvax.” Money would rotate from Solana to Luna to Avalanche and then back to Solana. For many people this strategy allowed them to compound their gains and multiply their money many times over.
With Solana leading the alt-Layer 1 rally again this year, questions have started over whether a new version of this rotation could repeat.
AVAX already appears to be an important part of this rotation, following Solana’s performance closely with a slight delay.
The question then is what’s replacing LUNA in this rotation?
Some people hypothesized this week that TIA and INJ, as two leading Cosmos Layer 1s, could replace LUNA in the rotation. These would be a natural fit given their strong performance and their position within the Cosmos ecosystem, one of the major alternatives to Ethereum.
Another possibility is that Ethereum layer 2s will somehow be included in the rotation this time. IMX and OP both received the latest capital rotation and were top performers this week:
Helium Mobile Plan Sparks Decentralized Physical Infrastructure Narrative
This week, Helium announced a $20/month unlimited phone plan in the US. If you’re unfamiliar with Helium, they’re a blockchain-based decentralized mobile network, powered by the HNT token on Solana.
This sparked interest in DePIN or Decentralized Physican Infrastructure. This report and graphic by Sami Kassab of Messari laid out the DePIN ecosystem comprehensively:
I could see DePIN playing a strong role in the next cycle, alongside other narratives like RWA and gaming. Similar to these narratives, DePIN represents:
Real business conducted on-chain
Inflows that are independent of speculation
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🔢On-Chain Analysis
Solana Activity Reaches New Heights
The Jito airdrop this week pushed Solana network activity to new heights.
DEX volume broke its ATH from the FTX collapse, hitting 70% of Ethereum mainnet’s volume at one point.
Solana NFT volume also took off as new money entered the chain and Jito airdrop recipients rotated into other ecosystem plays.
For SOL investors, it’s crucial to watch whether these metrics fully retrace or stay elevated from their pre-airdrop levels.
Trader Joe Fees Jump to Top 10
Trader Joe, the leading DEX on Avalanche and a top DEX, was a major beneficiary of Avalanche’s strong performance this week. JOE’s fees broke into the top 10 of all crypto applications.
🛠️Tool Spotlight
Become an Industrial Airdrop Farmer with Dropbook
With the Jito airdrop delivering 5 figures to even people with small wallets, many DeFi users are taking airdrop more seriously now. Airdrop farming has never been so competitive and one way to get an edge is to use multiple wallets for farming.
Managing airdrop tasks across multiple wallets can be a challenge. I came across this app called Dropbook that lets you track activity and app interactions for up to 10 wallets in one place.
As a reminder, airdrop farming is basically “pre-farming” a DeFi protocol by using it early before it has a token. These can be quite lucrative since you typically receive the token at launch.
📅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