A weekly recap of the most insightful news, analysis, and capital flows in the wild west we call crypto.

Hello and welcome back to the Web3 Rewind! Per usual in this industry, lots has happened this past week. Here's what we have in store for you:

• Uniswap under SEC glare

• Memecoins picks and shovels

• Monad raises $225M

• Coinbase class action lawsuit revisited

• Tensor airdrop

• Solana breaks down

The Latest

Uniswap under SEC glare

Picks and shovels dept.

Memecoins

Memecoins have been all the rage. VCs are starting to talk about memecoins as a GTM strategy. Thought leaders can’t stop posting about the attention economy. The financial nihilism supercycle often gets brought up with crypto as the only way out. I think at this point it’s safe to say that memecoins have transformed into something much, much larger if they aren’t already a huge talking point of crypto.

For those who want a fun memecoin taxonomy, here are a few categories that memecoins might have. Meme-first memecoins that are, well, memes. These are tokens such as PEPE, DOGE, and SHIB. Next up, community first memecoins, which align with a community or a protocol. Examples include DEGEN for Degen on Farcaster and BONSAI for Lens protocol, or perhaps ZYN for Zyn pouch users. There are also event-based memecoins such as BODEN or TRUMP which act as a prediction market for the US presidential election.

The point here is that there are many types of memecoins and infinitely many more memecoins to choose from. For every person you see on the Twitter timeline that has generated a 1,000x on a memecoin, there are likely 999 others who chose the wrong memecoin and lost everything.

If you’re like me and no good at picking memecoins, how else should one long memecoins? As the saying goes, “During the gold rush it’s a good time to be in the picks and shovel business.” The same applies to memecoins. So what are the picks and shovels of memecoins? There are a few.

First on the list, we have something like pump.fun. This is a website that easily allows anyone to create a memecoin on Solana or Blast. A user enters a ticker, an image, and then the token goes up for trading. Once it hits $69K in market cap, $12K worth of liquidity is deposited into Raydium on Solana and burned, with pump.fun taking a 2 SOL fee. So far, they’ve hit a daily revenue of $350K, which works out to a cool ~$100M, with a team of three.

Next on the list of picks and shovels is something like DEX Screener. This is where the majority of crypto participants check the charts for their memecoins, and they charge $299 every time someone wants to attach their social links to their memecoin chart.

Lastly, there’s something like Telegram trading bots. These bots probably generate $1B in revenue every year, and unlike the two other picks and shovels mentioned above, most Telegram trading bots have tokens that you can purchase. Look for the picks and shovels as these will likely have much better risk-reward, unless you want to give a try at picking the next 100x memecoin. — Joseph Cooper, Decential Media

Quick Bits

Monad raises $225M

• It’s monster raises season. This time, it’s Monad, who announced a $225M raise. It really didn’t take long for the venture market to go from completely dead to sky-high valuations and fundraising amounts again.

• Monad is an alt L1 that will scale the EVM. Scaling the EVM is a hot topic these days given that most Ethereum based L2s are still struggling to scale and reaching a max of ~50 TPS. That won’t be enough for the next 1 billion users, whenever they come.

Coinbase class action lawsuit revisited

• In February 2023, Coinbase won a motion to dismiss a proposed class action lawsuit against them for facilitating the trading of unregistered securities. A US District Judge ruled that because Coinbase never claimed to hold the titles to the tokens in question, it was not the actual seller of the assets.

• However, a US appeals court has partially reversed the decision to toss the lawsuit, and said the lower court needs to determine which Coinbase user agreement is pertinent to the case.

Tensor airdrop

• Tensor, the premier NFT marketplace on Solana, has finally launched its token. TNSR launched to much fanfare on Monday, with the FDV of the NFT exchange currently hovering around $1.7B.

• One could compare this to Ethereum’s premier NFT marketplace, Blur, which is currently trading at a $1.6B FDV. If you think either is undervalued, this might make for an interesting ecosystem bet.

And last but not least

Solana breaks down

Solana has been a victim of its own success in recent days. The problem? The chain just has too many damn transactions. At this point, you may be thinking, well if it has too many transactions, doesn’t that just mean your transactions take a little bit longer or are a little bit more expensive than normal? In actuality, the problem is much more complicated than that, and ultimately, it has resulted in a vastly degraded user experience.

Without going too much into the technical details, there are two main problems right now. The first problem appears at the networking layer before the transactions even make it to the block leader (the validator in charge of constructing a block). The networking layer is similar to the communication layer of the Internet. It’s used to send packets of data from one connection to another. In Solana’s case these are known as transaction packets. Solana uses QUIC which gives builders the ability to drop transactions based on certain criteria so that the chain doesn’t crumble against overwhelming demand, and therein lies the problem. Due to overwhelming demand, block leaders are forced to throttle certain connections, resulting in dropped transactions. As a result of block leaders being forced to drop certain transactions, the natural solution as a user is to spam transactions as much as possible so that the probability of one of your transactions going through increases. That is exactly what arbitrage bots are doing, resulting in most Solana users having to submit the same transaction ten times before they manage to get it through successfully.

There’s a second component to this problem which certainly doesn’t help, Solana’s ill-designed fee markets. Currently, Solana charges a fixed base fee per signature, which means that no matter how much of a block a transaction takes up, the signer pays the same fee, which doesn’t make sense considering the main thing a blockchain sells is block space. Ideally, you want users to be paying a higher transaction fee if they’re consuming more block space. Such a transaction fee mechanism certainly doesn’t disincentive anyone from spamming the network. Anyway, the point I’m trying to make here is that even the best blockchains are still struggling with scaling. There are a million different challenges to blockchain scaling, the execution environment, the networking layer, message propagation, transaction fee markets, state bloat. The list goes on. Some of crypto’s brightest minds are working on tackling these individually, but sometimes these challenges have to be tackled in combination. For all the naysayers that have whined about there being too much infrastructure investment and not enough consumer applications investment, hold your horses, we might need just a bit more infrastructure investment. — JC

Have you read the definitive history of Ethereum? No? Well then get your copy of Out of the Ether while you can.