🥛 99 problems but prices ain't one....
GM. This is the Milk Road. The newsletter that's got you covered with everything crypto like a toupee on a bald man's head.
Here's what we got for ya today:
- 99 problems but prices ain't one
- Numbers of the day
- Funding Friday
- Meme of the day
99 PROBLEMS BUT PRICES AIN'T ONE
Yesterday was one of the biggest days in crypto history. The Ethereum Merge.
So how'd Day 1 with the new Ethereum go? Well, it was kinda like starting 7th grade at the same middle school.
You’re familiar with the building, and other students. The air is filled with excitement. But there are always gonna be issues on the first day... (i.e you read your schedule wrong and went to the wrong class or just get shoved into a locker by an 8th grader)
And for Ethereum, there were 2 problems people were worried about:
Problem #1: ETH dropped 10%
Did the merge not work or why is Ethereum down? I thought we were supposed to be to $10k by now
— greg (@greg16676935420)
Sep 15, 2022
With the Merge complete, everyone thought we were gonna be on our way to $10k. Obviously getting to $10k in one day was never gonna happen.
But no one expected the price to drop 10%. So what gives?
1/ Liquidations. ~$130m worth of ETH has been liquidated over the last 24h.
These are people that placed bets that the price of ETH would go up. But when the opposite happened, they lost the bet and got liquidated. Driving the price of ETH down more.
2/ People were preparing to sell once the Merge happened. The total amount of ETH that was transferred to all exchanges spiked in the days leading up to the Merge.
This usually signals a big sell-off coming.
Problem #2: ETH is still inflationary
The total supply of ETH has gone up ~400 ETH since the Merge happened.
But, but… I thought ETH was supposed to be deflationary after the Merge? Everyone was calling it "ultrasound money"? Did we all get bamboozled?
No, not at all. Ethereum can still be ultrasound money. Let me explain.
First off, let’s get some of the terms out of the way. To understand ultrasound money, you have to understand sound money.
- Sound money is stuff like gold or silver. There are assets that people normally turn to when inflation gets rough because they hold their value
- Bitcoin is also considered sound money since the supply is always capped. (There will only ever be 21m BTC ever)
Ultrasound money is the next level - it has a decreasing supply.
So how can ETH become ultrasound money? It all has to do with 2 things
- the amount of ETH staked. More staked ETH = more rewards for the stakers = more new ETH coming into supply
- Gas fees. This depends on how much people are using the Ethereum network. More usage = higher gas fees = more ETH gets burned
So... the more ETH that's staked, the higher the network usage needs to be in order for it to become deflationary. Here's a great chart to help visualize it.
As you can see, in most of the scenarios Ethereum is deflationary.
So, where are we now? Right now there is ~13.6M ETH staked. So, the average gas fees need to be around 15 GWEI (unit for gas) in order for ETH to turn deflationary.
So is Ethereum “ultrasound money” right now? Not at the moment. Gas fees are sitting at ~10 GWEI (hence why the supply of ETH has gone up).
But once network usage on Ethereum goes up again (i.e there's a hyped NFT mint) then Ethereum will become deflationary.
Which is why we ain't worried bout prices at all right now. We got our eyes on the long game!
TODAY'S EDITION IS BROUGHT TO YOU BY PANINI
I’ll never forget opening my first pack of sports cards. They were my “first love”.
But there was a problem... I couldn’t stop bending the edges and spilling my Capri-Sun on it.
So I was hyped when I heard Panini was getting into NFTs. And they just released some new packs last week.
Introducing the 2021-22 Panini NFT Donruss Optic Football Packs. Each pack cost $10 and contains a mix of different tiered cards.
And to make it all more interesting, Panini has Set Challenges that can win you an additional NFT - like a Patrick Mahomes or a Tom Brady.
- Base Rated Rookie – Trevor Lawrence – Users that have the full Base set in their accounts 30 days after the program launches will receive the Trevor Lawrence Donruss Optic Base Rated Rookie NFT
- Base Aqua Parallel – Patrick Mahomes – Users that have the full Aqua Parallel set in their accounts 30 days after the program launches will receive the Patrick Mahomes Donruss Optic Base Aqua NFT
- Base Red – Tom Brady - Users that have the full Red Parallel set in their accounts 30 days after the program launches will receive the Tom Brady Base Red NFT
Oh, baby! I can’t wait to get my hands on that Patrick Mahomes card…
Interested? Click here to join in on the fun!
NUMBERS OF THE DAY
60k eCommerce sites can now accept crypto thanks to a partnership between BigCommerce, BitPay, and CoinPayments.
Why does this matter? BigCommerce processes more than $10b in payments each year and they run e-commerce sites for companies like Sony and GE’s.
And BigCommerce believes this will help them compete with their biggest competitor, Shopify.
How? By reducing declined payments, lowering transaction fees, and reaching more customers.
A lot of e-commerce stores are going to learn what a “bitcoin” is and have the option to use crypto for the first time. That’s a win if you ask me.
36.8 ETH how much someone paid to mint the last NFT on the old Ethereum chain before the Merge happened. The Chain Who Must Not Be Named.
So, what was the point of paying $60k to mint an NFT? Well, the better question is, how much would you pay for a piece of history…it was the last block ever produced on the proof of work blockchain.
They even left a message on the last block...
“You make the commitment and nature will respond to that commitment by removing impossible obstacles. Dream the impossible dream and the world will not grind you under, it will lift you up. This is the trick.”
Sounds like what I got in my fortune cookie last week.
It’s Friday! Which means it’s time to give you a rundown of Web3 companies that got funded this week.
We saw ~$300M get invested into crypto companies throughout the week. Here’s who got the money:
Stack got $2.7m to develop an education & trading platform for teens and parents.
Magna got $15m to build a token management platform. Easily airdrop & distribute tokens to your team, investors, and community. And guess what? Your boys at the Milk Road are investors in this one!
MetaFi got $3m for its new financial metaverse. It lets you socialize with your friends as you trade tokens & NFTs. And you can see other users’ trades in real-time
Thirdwave got $7m to build a blockchain discovery engine.
Arpeggi Labs got $5.1m to develop a platform for musicians to publish their sounds for others to create with. You get credits every time your sounds are used.
If you wanna check out the complete database of companies that have raised money in 2022, we got 'em for you right here.
MEME OF THE DAY
That's a wrap for the week ladies & gents, see ya next week!
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What'd you think of todays' edition?
VITALIK PIC OF THE DAY
Vitalik and a few of his fans...
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.