The question of whether Bitcoin should be peer-to-peer cash, or just digital gold as it is now, continues. Jack Dorsey believes simply being a store of value (SoV) won’t be sufficient, but some people I respect, such as Nic Carter disagrees. Still others, like Charles Calomiris on the most recent episode of Hidden Forces, think that stablecoins, not Bitcoin, will enable a radical improvement of the concept of unit of account and medium of exchange.
Next, stablecoins and the revenue narrative. Something all of us crypto-native investors have had to wrestle with is how to express our bullishness on the rise to prominence of stablecoins, since equity in stablecoin issuers isn’t really possible on-chain right now. Well, perhaps Hyperliquid is the best way, especially in light of how much USDH dominated CT (Crypto Twitter) discourse this week.
USDH is no more than a reserved ticker on Hyperliquid, yet it had seven high-profile stablecoin projects (Native Markets, Paxos, Athena, Sky, Agora, Bastion, and Frax) vying for the coveted ticker. Many on CT were impressed that these bidders were writing public love letters while fighting each other. They even submitted revised proposals. It wasn’t all good vibes. Haseeb Qureshi of Dragonfly posted on X that this process was all political theatre, that Native Markets was the predetermined winner. Several validators replied that Mr. Qureshi was wrong.
As a HYPE bag holder, I agree with Flood: “I’m ethically and economically aligned with whoever wins the USDH proposal.”
Jokes aside, The Bachelor USDH edition will likely have long-lasting effects outside of Hyperliquid. It has already led Mert, Solana royalty, to muse that a blockchain ecosystem should get the majority of the dominant stablecoin’s yield. Currently that yield is captured by the issuer (Circle, Tether, Paxos, Sky, etc.). Hyperliquid has shown that this will change. Very cool stuff.
The news last week of stablecoin-focused “corpo” chains (Tempo and GCUL), has some in the blockchain space alarmed. I thought this articulated why well. Speaking of Tempo, Ethereum advocates did not react well to these potential Ethereum L2s choosing instead to be EVM-compatible L1s.
Some, like Bankless's Ryan Adams, claimed it was a 50% win for Ethereum, which he counts as a win. This seems downright reasonable when contrasted to others, such as this X poster who outlined a way Tempo could be an L2. The following quote is one of five components to make Tempo retain its feature set but be an L2:
“use multiple L2s automatically under the hood in the tempo SDK. Especially fractal L3 scaling settled on tempo L2 validium and ultra scale L2s like Mega and Rise.”
I like Ethereum and its ecosystem. I agree with Omid Malekan that Ethereum’s credible neutrality and robust decentralization is valuable. I’m an ether bagholder, but comments like the above, and stories like this one make me question whether Ethereum will win in the long term.
On the other hand, Ethereum is still home to the most bulletproof defi protocols, and some of the most innovative ones. For example Wildcat, which has created an innovative marketplace for uncollateralized loans. This week Wildcat had its first default, an unfortunate but inevitable outcome. Wildcat gave a good overview of what happens next.
Finally, the last story is a reminder of just how crazy, detached from reality the last cycle got. The news that a Bored Ape holder sold his JPEG for $37,000 after buying it for $425,000 was mostly met with jeers and disbelief that things got so out of hand last cycle. However, the most interesting take was that this speculative (sometimes outright criminal) yet widely condemned part of crypto is in fact a pressure valve of sorts, allowing the overall economy to proceed without bubbles forming. I hope that’s true!
-David Sencil
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