Points, $POINTS, and what's the point?

Meme coins are pumping on Ethereum and Solana while builders question whether offchain points are effective loyalty mechanisms...

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Forefront
December 18, 2023

Happy Monday!

Welcome to the 171st edition of the Forefront Newsletter, now more dynamic than ever. If you’re new here, we give you a weekly roundup of the best news and insights at the intersection of crypto, culture, and community.

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This week we’re covering:

Let’s get into it…

Week’s Highlight

What’s the POINT?

Three pieces of news captured the crypto zeitgeist this week:

  1. Rainbow Wallet launched Points. These points are offchain, rewarded to users based on their in-wallet activity. It’s essentially just a loyalty program (the points can’t be sold, but it seems like they’ll be able to be redeemed later), but it has led to lots of discourse as to whether crypto builders have lost the plot, relying on web2 growth hacks to build crypto-native products.

  2. $POINTS launches from the Farcaster community. As an ode to the offchain points conversation, a member of the Farcaster community created $POINTS, an ERC20 on Ethereum mainnet that caught fire as a meme coin this week. There were some hiccups with the founder and initial mint funds, but all in all, the saga led to a range of meme coins being launched from Farcaster (and DAU highs on Warpcast).

  3. Degens are pioneers. This all led to some meta discussion between builders and investors around whether the ecosystem has learned anything over the last few years. Is crypto still just a global, 24/7 internet casino? Is this all we’re able to rally people around? Some folks argued that “degens” are necessary to build the tech and use cases we actually want to build.

So where does this leave us?

While we make our way out of this bear market, it’s clear that usage and demand on L1s like Ethereum and Solana, and EVM L2s, are only growing. Folks have been building tirelessly throughout the bear on non-casino use cases, and communities have been forged that will dictate the culture of the next bull market.

Let’s see if the builder spirit can permeate the casino more than during the last bull – our bet is that it will.

What’s Poppin’

Multiple Ethereum-based applications including Zapper, SushiSwap, Phantom, Balancer and Revoke.cash were compromised early Thursday due to a Ledger security breach. Ledger, the Paris-based crypto hardware wallet manufacturer, said it has fixed the malicious code as of 13:35 UTC. The company also warned users to “Clear Sign” transactions, a way to ensure you are interacting directly with the company’s website and software. Blockaid, a blockchain security firm, said upwards of $150,000 in crypto had been lost due to this unique “supply chain attack” on Ledger’s Connect Kit, which is deployed across the DeFi ecosystem.

The Solana phone – a once-struggling product – is turning into a sellout. The meme coin $BONK is almost certainly the reason why. Arbitrage traders appear to be chasing a 30 million $BONK token airdrop that's available to every owner of the Saga phone. At current prices that much $BONK is worth nearly $700 for a phone that costs $599. The euphoria around $BONK – Solana's dog-themed equivalent to Dogecoin – has led to a turnaround story for Saga, which just one week ago faced dimming prospects amid forgettable sales figures.

This essay from 1kx delves into the evolution of wallet infrastructure in the web3 landscape. It highlights the challenges posed by traditional wallet systems, such as the necessity of installing additional software and managing novel currencies, leading to high user churn rates. A significant focus is placed on the concept of account abstraction, a key development in 2023, which simplifies the user experience by separating account management from key management. The introduction of ERC-4337 and similar innovations have been pivotal in reshaping the wallet ecosystem, altering market structures and the dynamics between users, dapps, and wallets.

Another market landscape from the Variant team, this essay explores the evolving realm of privacy in blockchains. It highlights the growing need for privacy-focused crypto applications due to heightened concerns over personal data protection. The essay discusses various technologies used for building private crypto applications, such as Trusted Execution Environments (TEEs), Zero Knowledge (ZK) proofs, Multi-Party Computation (MPC), and Fully Homomorphic Encryption (FHE). It assesses the pros and cons of each technology and their suitability for different applications. The piece also underscores the importance of balancing privacy needs with regulatory compliance in the development of crypto infrastructure.

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