GM PRO DOers!
Another day, another opportunity to look onchain! 👀🔛⛓️
In the traditional world, we’d need to wait for earnings season 📊 to understand how businesses are doing or the FED minutes ⏳ to understand how the economy is doing.
In web3, we can look anytime we want.
It truly is amazing. 🤩
In today's 👀🔛⛓️report, we’re looking into the top 5 themes that are driving web3 right now. 🚀
Those themes include:
📉Inflation (yes, we can look onchain for this too, thanks to oracles!)
📈ETH Staking + RocketPool
📈Blockchain Gas Fees
📈Blockchain Activity (Bitcoin + Ethereum) + 📉Users
📉NFT Marketplaces + 📈Lending
There’s a lot going on in web3 right now. 🌪️
Unfortunately, the BIG things happening are not the big mainstream things.
Our themes are not about web3 gaming 🎮, social 🗣️, tickets 🎟️, etc. reaching the masses. 🌍
Not yet.
Instead they are things like macro, staking, gas fees and other things that most people in the world will simply never care about. 😴
That’s ok. It means we are early, which is exactly how we capitalize on the next big phase of the internet.
Let’s look onchain before looking onchain is cool. 😎
Let’s understand these technologies and what users are doing before the mainstream understands this stuff.
This allows us to build or invest ahead of everyone.
But before we head into it, it’s announcement time! 📢
All of our PRO content revolves around helping YOU build and invest in web3. Yet, I’ve never sat down with any of you to talk about your web3 journey.
That ends today! Because I want to give each and every PRO member 20 minutes of my time to talk about investing & building in web3.
I’ll listen to your journey & provide my honest input to help you thrive in this ever-evolving space.
Let's jump on a call and chat about what you're building or how you're investing to ensure you can capitalize on the next big phase of the internet!
Click the button below to…
Back to today’s report… First on the list is inflation 💸
1. Inflation? Never Heard Of It 🤷
I have a few charts 📊 that will make you think twice about the “inflation fear mongers” on Twitter.
First, I’ve shown this before, but when we look onchain, using millions of data points in real time, we see that inflation in the USA is likely sitting around 3.48% rather than the government reported 4.9%. 📉
Even though 4.9% was also down from the previous month and below what was forecasted.
One thing to understand about inflation numbers is that we typically look at CPI 🛒, which means the Consumer Price Index (inflation on the things that we consume).
There is also something called the PPI, which means the Producer Price Index (inflation on things being produced). 🏭
CPI typically follows the path of PPI, which makes sense because if the price to produce something goes up it’s likely that the price to sell it (aka consume it) will go up too. The same is true when prices go down.
You can see its correlation in the chart below.
It's pretty much never more than 2 months off. 🗓️
US PPI is sitting just above 2%. My guess is that the US CPI will be below 3% by July 12th (two CPI announcements from now).
In fact, I believe within the next year CPI may go negative. Yes, inflation can actually go negative (it’s a year over year % change). ⬇️
But if inflation is such a big problem it should be impacting countries worldwide. 🌍
Let's look outside of the US to understand the trends worldwide in other important economies.
Spain = -1% PPI 📉
China = -4% PPI 📉
Brazil = -2% PPI 📉
Norway = extreme deflation 📉
Inflation is old news.
We reached extreme highs due to supply chain issues, not stickiness in the economies. Something many can’t seem to wrap their heads around. 🤔
The sooner you realize this, the easier the macro environment looks.
This appears to be a typical business cycle 🔄 that will result in the lowering of interest rates and eventually the continuation of money printing. 💸
Other countries have already done exactly this (looking at you, China) and the USA is close.
Be patient and prepare for lift off 👀
2. ETH All Time Highs! Staking not Price…yet!) 🚀
It’s been just over 1 month since the Ethereum upgrade ⚙️ which enabled staking withdrawals.
We wrote a PRO report back in March 📝 all about the staking industry and where we thought it would go after the upgrade.
Many thought it would trigger a lot of selling, we suggested the opposite in the medium to long-term.
We were right… but a lot faster than we expected. ⚡
One month in and we’re already smashing all time highs in terms of total $ETH staked. 💰
Not only has ETH staking been derisked, but since activity has picked up (more on why in the coming themes), validators are making a killing!
You can earn >6% risk-free on your ETH by simply exchanging your ETH into stETH (Lido’s staking token) or rETH (Rocketpool’s staking token).
To earn 6% risk-free on a deflationary asset is simply unheard of. 🤯
Speaking of Rocketpool, we also wrote a PRO report about its token $RPL, their business model and how we thought it was positioned to perform the best from the Ethereum Upgrade.
Rocket Pool has gone from 8% market share to 9.43% since the upgrade ⏫
It’s also the #1 performing protocol of the top 20 (those above $500m TVL) protocols on Ethereum in terms of TVL in the last month. 🏆
Notice there is only 1 protocol in the green. 🟢 It pays to understand tokenomics, trends and look onchain!
3 & 4. The Real Inflation Is In Gas Fees… Yet New Users Aren’t Driving This. 🫤
We are in a historical moment for Bitcoin. 😎
Gas fees are the 3rd highest in history…
And transactions on Bitcoin are almost double previous all time highs 🤯
But don’t be fooled… This meme coin and JPEG mania on Bitcoin isn’t bringing in new users. It’s just a different casino for the same gamblers. 🎰
The same is true with Ethereum. 🎲
People think $PEPE and other memecoins are onboarding retail back into crypto.
Although gas on Ethereum is heading upwards… ⛽
… and so are the unique wallets trading on Uniswap 🦄
… active wallets on Ethereum aren’t budging yet 😑
Sorry friends, we either need to create real use cases to onboard the masses or wait for the price of $ETH or $BTC to reach all time highs again for everyone to FOMO back in. 🤷♂️
Let’s see which one happens first for this cycle!
Editor notes: I think retail investors (the masses) will return when prices of $ETH and $BTC reach ATHs! How about you, though?
What do you think will make people FOMO back in? Let us know by replying to this email or on Substack and we’ll respond!
At the moment, all of the activity we are seeing onchain is simply degens being degens.
Speaking of useless onchain activity… 🤦♂️
5. NFT Volumes Down BAD 👎
NFT volumes are going from bad to ugly. 💀
To add to this, any life we see in these markets are simply an illusion. 👻
Don’t be fooled by this “spike” you can see in the chart above so far in 2023.
Most of this can be attributed to airdrop farming 👨🌾 on Blur in addition to volumes simply looking higher because the price of ETH is higher than it has been in the last year.
The other way to prop up this market in the short term is via lending, something Blur has just begun with their new protocol Blend.
While the numbers are still small, it’s pretty fun to watch people take out loans to buy $100,000+ JPEGS live. You can follow along with our PRO dashboard here.
As far as I’m concerned, the NFT bubble has popped and hope for 99.9% of the speculative NFTs from the past years should be lost. 💔
NFTs, of course, are not done, in fact I’m very bullish on this technology and at Web3 Academy, we use NFTs ourselves (just not for speculation).
We had a very interesting conversation on how NFTs will change the internet during our Live Eyes on Chain event earlier this week, together with fellow PRO members!
And as you know, you needed to possess a PRO/FOUNDERS Pass (NFT) to join.
The report you’re reading right now was born post our meeting on Tuesday! I went over the charts above and thoroughly explained the implications of each.
Those who attended had the chance to ask questions and get more details and information about what’s going on.
If you didn’t have the opportunity to attend, don’t worry! We’re hosting these events every month. All you have to do is:
Subscribe to our community calendar so you know when there’s an event coming up.
Join our Discord (where all of our events are held).
We’re also planning another event by the end of this month. Keep your eyes open and make sure you’re in our Discord! 🔥
Wrapping Up
Web3 is currently in a state where its nothing more than a digitally native global casino. 🎰🎲
It’s a bit frustrating to see how much money is wasted or lost playing in this degen sandbox. 🥲
That said, coming out the other side is plenty of amazingness that will completely change the way we use the internet.
It will distribute ownership online 🌐, provide new ways for creators and businesses to monetize 🤑 and provide equality and freedom to billions of people worldwide. 🙌
I’m so excited for all of this to occur and grateful to have a front row seat to watch it happen and be part of its direction.
Until then, I will continue to accumulate and stake $ETH while watching the gamblers and degens burn its supply on my behalf. 😉
If there is one thing to take away from this report it’s that the supply of ETH is 📉 “down only” while the demand for ETH (via staking, gambling or building real things) is 📈 ”up only”.
There is no other asset that I can be 100% confident in those supply and demand dynamics.
Friends, you know what to do! 👊
As we wind down this report, it's important to remind ourselves why we're here.
We're at the forefront of a new era, and while the path might be filled with uncertainty and volatility, the end goal is transformative.
Web3 isn't just about financial gains—it's about reshaping the very fabric of our online experiences.
So, keep looking onchain, keep decoding the data, keep building, keep learning, and I’m confident you’ll stay ahead of the curve! 💫
ABOUT THE AUTHOR
Kyle Reidhead
Founder of Web3 Academy and Impact3
Find him on Twitter
🟣 PRO ACTION STEPS
BOOK YOUR CALL WITH KYLE
As a PRO member, you can now book a 1-on-1 call with Kyle to talk about investing & building successfully in web3.
CLAIM PRO NFT
As a PRO, you’re entitled to a PRO or FOUNDERS Pass (NFT), depending on your subscription.
This Pass will grant you access to our token-gated Discord and to other perks such as early access to various protocols and discounts to IRL and online events.
To grab your Pass, simply click the button below & connect your wallet and email address.
JOIN OUR DISCORD
As a PRO or FOUNDERS Pass, you have exclusive access to our token-gated Discord channels dedicated to PRO members!
Upon claiming your Pass, head to Discord and connect your Pass in the #start-here channel (WEB3 ACADEMY PRO category) to unlock access to PRO-only channels!
Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.
