What Opportunities Await in the Upcoming Ethereum Cancun Upgrade for Various Tracks and Cryptocurrencies?

What Opportunities Await in the Upcoming Ethereum Cancun Upgrade for Various Tracks and Cryptocurrencies?

What Opportunities Await in the Upcoming Ethereum Cancun Upgrade for Various Tracks and Cryptocurrencies?

In addition to the Bitcoin halving, the upcoming Ethereum London upgrade will be one of the most anticipated events in the crypto world. As known to all, the London upgrade is an important upgrade for Ethereum, aimed at increasing data storage and reducing costs. The London upgrade includes five EIPs, with the most market attention on EIP-4844, which aims to solve Ethereum’s scalability issues and help reduce transaction costs for Ethereum Layer2 solutions, which will directly benefit Layer2 and other related ecosystems.

Due to the goal of enhancing the security, scalability, and functionality of the Ethereum network, the London upgrade means that some tokens may have more development opportunities after the upgrade. The following will explore which tokens in the Ethereum London upgrade background may have development opportunities. (This article is for reference only and does not constitute investment advice)

Table of Contents:
Toggle
Layer 2
Metis (METIS)
Loopring (LRC)
Manta (MANTA)
AltLayer (ALT)
Restaking (RSTK)
LSD
PRISMA
Stader (SD)
RPL (Rocket Pool)
Derivatives
GMX (GMX)
Vertex (VRTX)

Layer 2
The core of the London upgrade is EIP-4844, which increases the throughput of Layer2 and reduces overall transaction fees by introducing Blob. This will inevitably enhance the competitiveness of Ethereum’s Layer2 relative to other Alt Layer1 projects. However, the competition among different Layer 2 solutions will also intensify. Here, we will look at several promising Layer 2 projects.

Metis is an Ethereum Layer2 Rollup platform that develops the Optimistic Rollup solution, which bundles and orders transactions on the Ethereum Layer 1 and sends back the data to the Ethereum Layer 1 main chain. Therefore, Metis can provide extremely fast transactions in just a few seconds. At the same time, it still maintains the security of the Ethereum Layer 1.

Metis’ Layer 2 network uses fraud proofs, assuming that all transactions are valid unless proven otherwise. If a transaction is invalid, a fraud proof needs to be submitted. Validators stake collateral, and in the case of invalid transactions, the collateral will be reduced. This is rigorously verified by Rangers. For Optimistic Rollup, the withdrawal time from Layer 2 to Ethereum is 7 days. Once the Metis network is fully deployed, the withdrawal time will be shortened to a few hours or even minutes through the Rangers network that verifies transactions. This is one of Metis’ key advantages compared to other solutions.

It is worth mentioning that the project has the participation of Vitalik Buterin, and the team’s recent focus is on decentralized sequencer, which is also a promising direction for Layer 2.

Loopring is a decentralized exchange based on zkRollup. It has both an automated market maker (AMM) exchange and an order book-based exchange. The Loopring protocol only uses the Ethereum blockchain as the data layer and verification layer. The performance of Loopring is sufficient for professional traders and market makers to deploy algorithmic strategies and other automated trading bots, which was not feasible on previous DEX platforms due to slow speed and high fees. By building on Loopring 3.0, the order book-based DEX has achieved commercial viability for the first time. Loopring expects non-custodial exchanges to gradually outperform and replace many centralized exchanges.

Loopring has been deeply involved in zkRollup for many years and is a well-established project in the industry. The team recently plans to develop the ZKEVM product Taiko, which has a relatively low market value compared to OP and ARB, but there may be surprises in the future.

Manta Pacific is a unique Layer2 ecosystem for EVM-native ZK applications on Ethereum, providing a scalable and cost-effective gas fee environment for ZK applications deployed solely using Solidity.

The notable features of Manta Pacific include:
– Manta Pacific provides programmable ZK as the EVM-native Layer2.
– Manta’s generic circuits can easily develop ZK applications using Solidity.
– Manta Pacific provides high scalability and low transaction costs for ZK applications using Celestia for data availability and ZKEVM for scalability.

Manta has recently gained a lot of attention, and currently, its trading volume and market value are still considerable, with potential for the future.

AltLayer is an open and decentralized Rollup protocol that brings a new idea of Restaked Rollups, which separates existing Rollups from any Rollup stack (such as OP Stack, Arbitrum Orbit, ZKStack, Polygon CDK, etc.) and provides them with enhanced security, decentralization, interoperability, and rapid finality of cryptographic economics.

Restaked Rollups combine the convenience of launching with OP Stack, Arbitrum Orbit, ZKSync from ZKStack, and Polygon CDK, as well as the powerful functionality of EigenLayer’s re-staking mechanism to secure the network and build a decentralized network. The founding team includes former Coinbase CTO and former a16z general partner Balaji Srinivasan, as well as Ethereum and Parity co-founder Gavin Wood, among others.

ALT is the native utility token of AltLayer, used for economic bonds, governance, protocol incentives, and protocol fees, among other functions.

This project is also a highly sought-after rollup-as-a-service solution, and it can be said to be a leader in this sub-category.

Restaking is a rare issuance project in the Ethereum staking track and can carry a larger track heat. Restaking allows LST (EigenLayer token) to be used as cryptographic economic security for active validation services in the EigenLayer network. Restake Finance proposes a decentralized method for re-staking revenue.

Users can re-stake their LST to EigenLayer by introducing the protocol’s re-staked ETH token (rstETH). Users’ LST will be deposited into EL through a DAO-controlled smart contract and will receive rewards for Ethereum staking as well as EigenLayer native rewards. rstETH is decentralized and fully backed by stETH on a one-to-one basis.

Restake Finance will be supported by the Restake Finance DAO, which ensures that the project maintains its decentralized nature and aligns its development with the interests of stakeholders. The DAO will govern through its utility and governance token, RSTK. Its core objective is to accumulate value for token holders through governance and revenue generation. The system will charge fees for all EigenLayer re-staking rewards and share those fees with RSTK token holders.

LSD
Prisma is a decentralized lending protocol that allows users to mint the stablecoin mkUSD, which is fully collateralized by liquid staking tokens.

Prisma enables users to mint the stablecoin mkUSD, which is fully collateralized by liquid staking tokens. This stablecoin is incentivized on Curve and Convex Finance to create a capital-efficient flywheel. Users can earn Ethereum staking rewards as well as transaction fees, CRV, CVX, and PRISMA.

Overall, Prisma is one of the most stable projects in the Ethereum liquidity staking derivatives track, with impressive performance overall.

Stader is adopting a modular approach to building smart contracts, allowing third parties to build different key solutions on top of it using their components.

In the short term, Stader is building native staking smart contracts for multi-chains, including Terra, Solana, and others, and creating an economic ecosystem for developing and launching solutions such as mining rewards similar to YFI, launchpads, game incentives, and liquidity staking solutions. In the long run, Stader focuses on unlocking platform approaches and nurturing third parties to develop several staking-related applications on the Stader infrastructure. Its investment institutions include Pantera Capital, Coinbase Ventures, Three Arrows Capital, True Ventures, Jump Capital, Accomplice, Blokchain.com, and more.

SD is the native governance token of the Stader protocol. SD token has four application scenarios: governance, priority authorization and reduced insurance, liquidity pool, and Stader infrastructure. The token distribution is as follows: rewards + mining 36%, public offering 4%, team advisors 17%, ecosystem fund 11%, private placement 17%, DAO fund 15%.

SD has shown significant improvement in overall business data in the fourth quarter of 2023, and its token price has also increased significantly. The development in 2024 is also worth looking forward to.

Rocket Pool is a decentralized staking pool for Ethereum 2.0, aiming to reduce the hardware and capital requirements for ETH2.0 staking. It aims to make Ethereum staking more accessible and decentralized, allowing users, DApps, and enterprises to profit by staking their ETH on the beacon chain.

RPL token has the following main uses:
– Node deposits: Operating Rocket Pool nodes requires a deposit, part of which must be staked as RPL. This ensures that node operators have a vested interest in RPL and Rocket Pool’s success, thereby increasing security.
– DAO governance: Users who hold RPL can participate in the decentralized governance of the Rocket Pool DAO through proposals and voting. The amount of RPL held determines the voting weight.
– Node rewards: A portion of node operator revenues is distributed in the form of RPL, which can incentivize the establishment of more nodes and thereby increase network decentralization.
– Staker rewards: Rocket Pool stakers can receive RPL rebates from commissions. Rocket Pool has made significant progress in development and commercialization in just a few years and has successfully built a leading decentralized staking infrastructure.

Overall, Rocket Pool is a leader in the Ethereum LSD track, and its project performance in the market is well recognized.

Derivatives
GMX is an AMM derivatives protocol on Arbitrum, supporting spot and perpetual cryptocurrency trading. Users enjoy minimal spreads and zero price impact, and can trade assets such as Bitcoin, Ethereum, and AVAX with up to 50x leverage. Its permissionless nature promotes inclusivity, allowing participants to participate without approval from central authorities, while providing deep liquidity for efficient order execution.

GMX token is a utility and governance tool that incentivizes holders to stake and share trading fees, driving ecosystem participation. As a revenue-rich protocol, GMX has evolved into GMX V2, expected to achieve significant growth and expand the range of tradable assets.

With the improvement of Ethereum and Layer2 performance, it is believed that GMX’s business will also be greatly assisted in the future.

Vertex is an order book derivatives protocol on Arbitrum, powered by a hybrid Central Limit Order Book (CLOB) and integrated Automated Market Maker (AMM), with LP market positions filling the order book to enhance liquidity.

Vertex offers low-latency trading and efficient liquidity utilization for a wider range of DeFi assets, leveraging its hybrid order book-AMM design. The off-chain sequencer architecture also helps minimize Miner Extractable Value (MEV) on the Ethereum L1 while achieving lightning-fast transactions. Its token is used for staking and participating in governance, as well as receiving trading rewards.

Similarly, with the improvement of Layer2 performance, Vertex is also expected to achieve significant business growth in the future.

It can be foreseen that with the performance improvements brought by this upgrade, more innovative applications in the Ethereum ecosystem will emerge, promoting further penetration of Ethereum in multiple tracks. At the same time, Ethereum will continue to drive technological breakthroughs and achieve transaction processing capabilities of hundreds of thousands of transactions per second in the future.

The successful implementation of the London upgrade marks the formal entry of Ethereum into the 2.0 era, and the Ethereum Foundation once again demonstrates its excellent technical vision and strong execution capabilities. As a leader in blockchain technology, Ethereum’s influence will continue to expand, and its ecosystem will become increasingly rich and complete.

It is worth mentioning that the Ethereum London upgrade will bring new opportunities to the entire cryptocurrency market, driving further development in various tracks. Paying attention to high-quality and innovative tokens in these tracks will provide investors with more opportunities for profit. Of course, investors should closely monitor the London upgrade and its impact on different tokens and make investment plans accordingly. However, it should be noted that any investment carries risks, and investors should approach the market rationally and make investment decisions based on their own risk tolerance.

Disclaimer: This article does not constitute investment advice. Investors should make their own investment judgments.

This article provides official content and does not represent the position and investment advice of this site. Readers must conduct their own careful evaluation.