If you’re into crypto, it’s easy to get discouraged lately, but it’s important to remain optimistic in these trying times.
This is exactly why Optimism's airdrop couldn’t come at a better time.
Introduction to Optimism
The Great Interest Hike
Binance Goes to France
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⏰ Top Headlines
🥃 Glass Half Full?
Optimism is a low-cost, high-speed Ethereum layer 2 blockchain solution which uses optimistic rollups to run computations off-chain.
Even though the TVL of Arbitrum, the leading L2 using optimistic rollups, is almost 6 times larger than Optimism’s, the two networks’ activity levels are remarkably similar, suggesting similar usage levels.
Last week, Optimism announced the intention of forming a decentralized autonomous organization (DAO) called the Optimism Collective. In addition, the highly-anticipated announcement of a native token and accompanying airdrop captured attention everywhere.
Transactions are expensive on Ethereum. That’s because all the traffic on the Ethereum network makes the price of admittance more expensive.
To solve this, a mechanism called rollups are employed. There are a few different versions, but Optimism unsurprisingly uses optimistic rollups to achieve this increase in efficiency.
Optimism executes this step off-chain, meaning that instead of using the Ethereum network to conduct transactions, it performs them without involving Ethereum and reports the results to Ethereum’s mainnet for recording.
The rollup is optimistic because it assumes all the data included in the rollup is authentic and correct. But, rollups still live in the real world. Periodically, fraud proofs are executed to validate the included data.
Transactions aren’t the only thing Optimism is rolling up these days. Coupled with the token and accompanying airdrop announcement comes news of the Optimistic Collective (OC), a brand new DAO.
Most airdrops are one-and-done, but Optimism is taking a different approach. Referred to by the protocol as a “season of airdrops”, the distribution of OP will take place in several different phases over time.
For those wanting to improve their outlook on life, a look on the brighter side isn’t difficult to muster.
To get started, it’s necessary to bridge funds from Ethereum, or another compatible network, to Optimism. After this step is completed, liquidity is able to move freely between the applications in Optimism’s ecosystem.
After confirming the transaction, funds will be delivered from the chosen source network (Ethereum in this case) to Optimism. After funds are successfully bridged, any dApp supporting Optimism can be used.
Missed your flight on the first airdrop? Don’t be pessimistic! Not only can you check your current eligibility on Optimism’s site, but the criteria to qualify for future distributions can be found there as well.
If you missed out on this airdrop, it was only the first in a campaign being perpetrated by Optimism, so don’t fret. Feeling particularly adventurous? Participating in Optimism’s ecosystem might qualify wallets to receive the remaining rewards.
⛰️ The Great Interest Hike
In response to the COVID-19 pandemic, the United States used economic stimuli that seemed endless to aid their citizens and keep the economy ticking.
At the time it felt like free money but, in fact, it came at a massive cost as now US inflation is currently at its highest level since 1981 sitting at 8.5%.
To provide stimulus in the US, the FED printed money and pumped it back into the economy using a mechanism known as quantitative easing.
The aim of this was to increase consumer confidence by encouraging spending thus stimulating the economy. However, this has caused high levels of inflation and the FED has now adopted a contractionary monetary policy to combat inflation.
This means that to combat inflation, higher interest rates will be used to discourage spending.
Yesterday, in an attempt to combat the high levels of inflation, the US Federal Reserve (FED) in their first of six major FOMC meetings announced a 0.5% interest rate hike, the highest hike in the last two decades.
In addition, the central bank outlined a program in which it eventually will reduce its bond holdings by $95 billion a month.
Fed Chairman Jerome Powell underlined the commitment to bringing inflation down but indicated that raising rates by 75 basis points at a time “is not something the committee is actively considering.”
Further rate hikes are expected in the following FOMC meetings. Markets are anticipating that rates will exceed 3% by early 2023 and thus markets shouldn’t be as volatile during future hikes.
🇫🇷 Binance Goes to France
As we know, one of the biggest obstacles to acquiring bitcoin is having an avenue to do so. Similarly, the more regulated exchanges there are in your country, the more likely the product will be top-notch purely because of competition. Binance just secured regulatory approval in France. Let’s take a closer look at the details.
As of May 4, Binance secured regulatory approval in France.
Binance will now be allowed to custody digital assets in France. Additionally, they may now facilitate the purchases and sales of such assets.
Binance is expanding its global operations - having also just obtained provisional approval to operate as a broker-dealer in virtual assets in Abu Dhabi this March-April.
Binance invested $108 million in its operations in France. They created a partnership with Paris-based startup incubator Station F.
As Binance continues to expand, they were forced to change its initial philosophy. Binance’s CEO said that its initial philosophy was a decentralized one.
By this, he meant no offices, no headquarters, or corporate entities. For the sake of licenses to expand, they are now temporarily based in the Cayman Islands (originally in Hong Kong before the ban on crypto trading).
While there were multiple exchanges available in France, the only big player (top 10 by volume) was Coinbase. With more established exchanges comes more word of mouth and advertisement. This sort of expansion can only be good for crypto as a whole.
BREAKING: Binance to invest $500 million together with Elon Musk in Twitter takeover - Blockworks
Gucci will accept payments in cryptocurrencies in the U.S. starting this month, as the luxury industry takes tentative steps into the digital-asset universe – Bloomberg
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