[Article] Monthly FP - EigenLayer and Rune Protocol (April. 2024)

Table of Contents

1. Numbers Tell the Story
1.1 EigenLayer Hype - $15B TVL and Launch of $EIGEN
1.2 Number of Token Sale at the Peak since Dec, 2021
1.3 Runes Protocol accounts majority of the Bitcoin Fee
2. Monthly Highlights
2.1 Layer 1, 2
2.2 Infrastructures
2.3 Applications
2.4 News
3. Upcoming Month’s Watchlist
3.1 Sui Network Announces SuiPlay0X1
3.2 Stripe Announces Crypto Payments Coming Soon

Researcher

Four Pillars

Heechang

1. Numbers Tell the Story

1.1 EigenLayer Hype - $15B TVL and Launch of $EIGEN

Source: EigenLayer - DefiLlama

EigenLayer, a restaking protocol on the Ethereum blockchain has surpassed a total value locked (TVL) of $15 billion. This significant increase in TVL arose after EigenLayer lifted caps on its system, permitting more actively validated services to become operational. The platform is designed to allow users to stake both native ether and liquid staked ether, which in turn, is restaked to secure other protocols.

Following the protocol's launch on April 9, 2024, several updates and new features have been introduced. One notable change includes reducing the minimum stake required for operators on the data availability layer, known as EigenDA, from 320 ETH to 96 ETH. This adjustment has likely made it more accessible for smaller operators to participate, potentially increasing the network's diversity and robustness. EigenLayer has also added six new actively validated services: AltLayer, Brevis, Eoracle, Lagrange, WitnessChain, and Xterio.

EigenLayer also announced this month that it is launching its native $EIGEN token. At its commencement, the token will have a circulating supply of 1.67 billion, assigned with a significant community focus—45% geared towards community incentives split equally between stakedrops, community initiatives, and ecosystem development. Additionally, investors and early contributors hold 29.5% and 25.5%, respectively, with a strict three-year lockup to encourage long-term stability and involvement.

1.2 Number of Token Sale at the Peak since Dec, 2021

Source: Summary analytics of token sales | CryptoRank.io

The recent number of token sales activities, including IDO (Initial DEX Offering), ICO (Initial Coin Offering), and IEO (Initial Exchange Offering), have reached high levels in April. This surge aligns with historical patterns where spikes in token sales activities correlate with all-time high prices in Bitcoin, suggesting a potentially cyclic nature.

The most notable fundraising was accomplished by Zeus Network, an interoperability layer designed in the Solana ecosystem. Zeus Network successfully completed a significant funding round, amassing $28.75 million for its native token during the IDO conducted on Jupiter LFG.

Additional noteworthy fundraising events included Fjord Foundry which raised $15.35M and Catamoto which raised $12.09M.

1.3 Runes Protocol accounts majority of the Bitcoin Fee

Source: Runes by cryptokoryo

The Runes protocol is a new standard on the Bitcoin network that allows for the minting of tokens, specifically focusing on memecoins. This protocol uses Bitcoin’s existing Unspent Transaction Output (UTXO) model along with the OP_RETURN opcode, a script that allows for the inclusion of small amounts of data on the blockchain without affecting transaction outputs. This makes the Runes protocol a mechanism for more efficiently implementing tokenization on the Bitcoin network compared to older methods, such as standards like the BRC20, derived from the Ordinals protocols.

Within its initial week post-launch, the Runes protocol generated over $135 million in transaction fees, a testament to its high adoption and utility within the Bitcoin community. This financial impact is reflected in the 2129 bitcoins consumed as transaction fees. The protocol’s heavy influence on Bitcoin transactions was further evidenced on 25th of April when Runes-related transactions constituted 45% of all network activity.

Since its inception, the protocol has facilitated over 3 million transactions involving the new token standard. Notably, the average transaction fee soared from $5 to $40, signaling an increased demand for block space, likely spurred by the Runes activities. This peak in transaction fees coincided with an uptick in Bitcoin’s mining difficulty, the first to occur immediately post-halving, suggesting heightened miner engagement and validation efforts within the network.

As for the tokens minted under this new standard, approximately 11,000 Runes tokens were created to date. Among these, the DOG token, related to the Runestone NFT collection, has emerged particularly prominent, boasting a market cap of over $400 million. Other noteworthy tokens include RSIC Genesis, Satoshi Nakamoto, Wanko Manko, and Bitcoin Pepe Matrix.

2. Monthly Highlights

2.1 Layer 1, 2

2.2 Infrastructures

2.3 Applications

2.4 News

3. Upcoming Month’s Watchlist

3.1 Sui Network Announces SuiPlay0X1

Source: Sui l SuiPlay0X1 - Coming 2025

The SuiPlay 0x1, announced by Mysten Labs and set for release in 2025, is a handheld gaming console that integrates native Web3 technologies. Developed in collaboration with Playtron, this device has the PlaytronOS, an open, device-agnostic gaming operating system similar to Android, but tailored specifically for gaming. This OS will support a variety of hardware configurations and will be compatible with major game stores such as Steam, the Epic Games Store, and specialized Sui Web3 games.

A key feature of the SuiPlay 0x1 is its integration with the Sui blockchain, which has features like zkLogin and Sui Kiosk SDKs, that link digital asset ownership directly to the user’s device account��a first in the gaming hardware industry. This allows for a new level of interaction and economic transaction directly through the gaming console, enhancing the player's engagement by utilizing blockchain's capabilities for asset management and transaction efficiency without the typical transaction costs.

The console is positioned not just as a gaming device but as a platform for broader blockchain applications, potentially even supporting activities like cryptocurrency mining. This strategic collabroation of traditional gaming with blockchain technology aims to open up new possibilities.

3.2 Stripe Announces Crypto Payments Coming Soon

Source: Tweet by John Collision, Founder of Stripe

Stripe, a major player in the digital payments sector, has a history of involvement with cryptocurrencies, though its approach has seen significant shifts over time. Initially, in 2014, Stripe began experimenting with Bitcoin, capitalizing on the burgeoning interest in digital currencies. However, by 2018, Stripe discontinued Bitcoin support, citing the cryptocurrency's volatility, lengthy transaction times, and increasing fees, which they believed undermined Bitcoin's effectiveness as a medium of exchange. The period during which they ceased support coincided with the first major downturn in cryptocurrency markets, known as the "crypto winter," which saw Bitcoin's value plummet dramatically.

Despite stepping back from direct cryptocurrency transactions for several years, Stripe kept an eye on the evolving crypto landscape. In 2019, Stripe showed a renewed interest in the potential of digital currencies by initially joining the Libra Association, a Facebook-led initiative aimed at creating a global digital currency. However, it later withdrew from the project which ultimately did not launch. In 2022, the company ventured again into the crypto space by facilitating fiat-to-crypto payments, marking another step towards integrating digital currency solutions into its services.

In a significant development, Stripe announced in 2024 that it would reintroduce cryptocurrency payment options. This time, however, the focus would be on stablecoins rather than more volatile currencies like Bitcoin. Specifically, Stripe plans to support payments using Circle’s USDC stablecoin on major blockchains such as Solana, Ethereum, and Polygon. This move reflects Stripe's strategic shift to leverage the benefits of blockchain technology — such as instant settlement and reduced transaction costs — while minimizing exposure to the high volatility characteristic of many cryptocurrencies. The decision to reintegrate cryptocurrency payments underscores Stripe’s recognition of the growing utility and maturing infrastructure of digital currencies as viable mediums of exchange in the global internet economy.

Thanks to Kate for designing the graphics for this article.

The author of this report may have personal holdings or financial interests in assets or tokens discussed herein. However, the author affirms that no transactions have conducted using material non-public information obtained in the course of research or drafting. This report is intended solely for general information purposes and does not constitute legal, business, investment, or tax advice. It should not be used as a basis for making any investment decisions or as guidance for accounting, legal, or tax matters. Any references to specific assets or securities are made for informational purposes only and should not be construed as an offer, solicitation, or recommendation to invest. The opinions expressed herein are those of the author and may not reflect the views of any affiliated institutions, organizations, or individuals. The opinions and analyses expressed herein are subject to change without prior notice. In addition, beyond the individual disclosures included in each report, Four Pillars, may hold existing or prospective investments in some of the assets or protocols discussed herein. Furthermore, FP Validated, a division of Four Pillars, may already be operating as a node in certain networks or protocols discussed herein or may do so in the future. Please see below links in the footer for FP Validated's participating network disclosures and for broader disclosure details.

Monthly FP - EigenLayer and Rune Protocol (April. 2024)