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GM, Tim here.
- Berachain is off to a shaky start.
- Ondo targets Wall Street with new blockchain.
- Justin Drake wants to fix Ethereum’s economics.
Bears strike Berachain
Berachain, the $3.2 billion bear-themed blockchain, isn’t living up to the hype.
Insider selling and a high initial valuation have weighed on the project since its February 6 launch.
Berachain’s native token, BERA, opened trading at around $13. It now trades for around $5 — a more than 60% drop.
Onchain records first identified by pseudonymous DeFi researcher Ericonomic show a wallet address linked to one of Berachain’s pseudonymous co-founders sold almost $1 million worth of BERA tokens received in the Berachain airdrop.
“He might be testing things in production or just adding liquidity, but even if this is the case, this should be addressed and explained immediately,” Ericonomic said.
The co-founder in question, Itsdevbear, who also acts as the project’s chief technical officer, did not respond to a request for comment.
Several investors, including Arthur Hayes of Maelstrom, say that the BERA token’s high initial valuation is the main reason for the asset’s declining value.
Investors have previously criticised crypto projects launching tokens at high valuations.
“Investors don’t believe there is upside potential if a project launches with an 11 figure valuation,” Marc Weinstein, a partner at crypto investment firm Mechanism Capital, previously told DL News.
Ondo’s new blockchain
Ondo Finance, one of the largest issuers of tokenised US Treasury bonds, will launch its own blockchain in an attempt to lure Wall Street investors to crypto.
The blockchain, dubbed Ondo Chain, was developed with input from some of the world’s largest financial institutions, Ian De Bode, Ondo’s chief strategy officer, said at the Ondo Summit conference on Thursday.
To address Wall Street’s fear of running afoul of regulators, validators on Ondo Chain will be invite-only.
“This means that only known and reputable — and often regulated — institutions will be allowed to run a validator,” De Bode said.
“This also means that when you as an investor come onchain, you can rest assured that your transactions are not going to be front-run, and you can enjoy similar protections like you do in traditional finance.”
Crypto-curious financial institutions, wary of public blockchains that can be accessed by anyone — including North Korean hackers — have previously created invite-only blockchains of their own. Those experiments have largely been failures.
A plan for Ethereum
Ether has failed to live up to its status as “ultrasound money.”
That’s according to Ethereum Foundation researcher Justin Drake, who has proposed changes to help offset the issuance of new Ether tokens.
To do so, Drake proposes reducing the high fees on the Ethereum blockchain.
Reduced fees would mean less Ether is destroyed in each transaction, but that reduced “burn” would be more than offset by new users who had previously avoided the blockchain due to its notoriously high fees.
“It’s much more lucrative to have 10M [transactions per second] with each transaction paying $0.001,” he said in a lengthy post on X, “than it is to have 100 TPS at $100/tx.”
Secondly, Drake wants to put a cap on new Ether tokens issued from staking.
He proposes an issuance curve in the shape of a croissant — an unusual analogy, but here’s what it means:
Once a quarter of all Ether is staked, the amount of newly issued Ether should peak at 1% of the total supply. As more Ether is staked, newly issued Ether declines, eventually hitting zero once half of all Ether is staked.
“To me a 50% staking soft cap feels credibly neutral and pragmatic,” Drake said.
Currently, around 27% of all Ether tokens are staked.
This week in DeFi governance
VOTE: Gnosis DAO ($1.96) votes on making Karpatkey a DAO and issuing a KPK token
VOTE: GMX ($0.00) DAO weighs using fees to strengthen token liquidity
VOTE: Arbitrum DAO votes to increase the Stylus Sprint programme budget
Post of the week
“How to DAO” author Kevin Owocki riffs on Uniswap’s latest promotional image.
pic.twitter.com/WVO7VaYUcA
— Kev.Ξth’s learning HOW TO DAO (@owocki) February 7, 2025
Got a tip about DeFi? Reach out at [email protected].
