Are Token Standards Enough?

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The Blends Briefs
TL’DR: Here’s a sneak peek into today’s newsletter

• Are Token Standards Enough?

• Bitcoin Ordinals Trading Hits 6-Month Peak.

• Coatue Management marks down stake in OpenSea by 90%.

• A16z crypto leads $4.2 million seed investment in UK’s Pimlico. 

• A new $25M Fund to Support Web3 Startups in Asia.

• Dictionmoics: EOA

A must-have
Are Token Standards Enough?

The Ethereum network supports various token standards that define the rules and functionalities of different types of tokens. One of the most widely used standards is ERC-20, which allows for the creation and transfer of fungible tokens. However, ERC-20 has some limitations, such as the lack of native support for meta-transactions, account recovery, and flexible verification logic. To address these issues, a new token standard, ERC-4337, has been proposed by a group of Ethereum developers.

ERC-4337 is also known as account abstraction or smart accounts. It enables users to create and use smart contract wallets that can have arbitrary verification logic instead of externally owned accounts (EOAs) that rely on signatures. This means that users can customize their wallets to have features such as social recovery, multi-signature, gasless transactions, and more. Moreover, ERC-4337 defines a decentralized relay network that allows any bundler (block builder) to participate in the process of including user operations (transactions) in blocks.

ERC-4337 is not yet implemented on the Ethereum mainnet, but it is expected to bring significant benefits to the ecosystem. It will improve the security and usability of token transfers, reduce the complexity and cost of wallet development, and enable new use cases for tokens. For example, ERC-4337 can support atomic multi-operations, aggregated signatures, and tokens with dynamic supply. ERC-4337 is compatible with existing token standards, such as ERC-20 and ERC-721, and can be adopted by any EVM-compatible blockchain project.

One of the advantages of ERC-4337 is that it allows users to have more control and flexibility over their token transactions. Users can choose how to verify their transactions, whether by signature, password, biometric, or other methods. Users can also delegate the payment of gas fees to third parties, such as relayers or sponsors, who can cover the costs in exchange for incentives or services. Users can also perform multiple operations in one transaction, such as swapping tokens, sending tokens, and updating their wallet settings.

One of the disadvantages of ERC-4337 is that it introduces some challenges and trade-offs in terms of security and efficiency. Users need to trust the bundlers to include their transactions in blocks and not censor them or manipulate them. Users also need to monitor the status of their transactions and be prepared to resubmit them if they are not confirmed within a certain time frame. Users may also face higher gas costs due to the increased complexity and size of their transactions.

Global Biscuits

Bitcoin Ordinals Trading Hits 6-Month Peak.
On Tuesday, Bitcoin Ordinals trading witnessed a significant surge, reaching a six-month peak, with a transaction volume totaling approximately $14.7 million. This spike in activity was predominantly facilitated by the Binance listing of ORDI, the original BRC-20 token associated with Ordinals. The majority of trading took place on OKX, contributing 60% of the daily Ordinals transactions, while Binance's ORDI price soared 124% to $13.21. The surge in trading activity was fueled by renewed interest in Bitcoin's price increase and Binance's backing of ORDI, causing widespread momentum across the Ordinals ecosystem. However, there was a misconception by Binance, misattributing Domo's token "Ordinals" to ORDI, resulting in creator Casey Rodarmor clarifying the misunderstanding. This increased activity coincided with a resurgence in the NFT market, signifying ongoing excitement in the broader Bitcoin NFT ecosystem following the previous BRC-20 craze that peaked in May.

Coatue Management marks down stake in OpenSea by 90%.
Investment management company Coatue Management has substantially marked down its stake in OpenSea by almost 90%, as reported by The Information. The reduction implies a revaluation of OpenSea to $1.4 billion or potentially lower, a significant decrease from its valuation of $13.3 billion earlier in 2022. This change in valuation occurred in the second quarter of 2023. Additionally, Coatue also marked down its stake in web3 infrastructure firm MoonPay by a similar percentage. OpenSea's recent staff cut of 50%, as announced by CEO Devin Finzer, amid a company-wide restructuring to focus on technological enhancements, speed, reliability, and overall user experience, further highlights a shift in the company's strategies. 

Tastes of the regions

A16z crypto leads $4.2 million seed investment in UK’s Pimlico.
A16z crypto, the crypto venture arm of Andreessen Horowitz, has led a $4.2 million seed funding round for UK-based web3 infrastructure company Pimlico. Pimlico seeks to enhance Ethereum usability by leveraging smart accounts via the ERC-4337 token standard. This standard allows for account abstraction, enabling custom logic in Ethereum accounts to overcome limitations like single-private-key linkage. The funding aims to support Pimlico's expansion and further development, with CEO Kristoff Gazso highlighting the potential for enhanced Ethereum usability through smart accounts. Prior to this, Pimlico had secured $1.6 million in pre-seed funding led by 1confirmation, Consensys, Safe, and over ten other investors, with the goal of facilitating easier Ethereum usage by providing infrastructure for smart accounts in the Ethereum ecosystem.

A new $25M Fund to Support Web3 Startups in Asia.
Ninety Eight, a Web3 ecosystem previously known as Coin98 Finance, has launched a $25 million Ecosystem Fund focused on fostering Web3 startups in Asia. The fund aims to financially and strategically support selected startups, leverage its network, and assist builders through its Viction blockchain, which features zero-gas transactions and security elements. A key part of the initiative is the utilization of the native $C98 token, which offers broad application potential in driving Web3 innovation. Managed by Arche Fund, the fund seeks to equip startups with vital tools, resources, and networks to empower them. Additionally, the company plans to launch Starship, a platform to nurture high-quality Web3 startups and offer investment opportunities. CEO Thanh Le emphasizes their commitment to supporting builders and advancing Web3 technology adoption. Interested startups can apply for funding through the Arche Fund's submission form.

Dictionomics
EOA 

EOA stands for externally owned accounts in the context of crypto. These are accounts that are controlled by private keys, which are usually held by human users or third-party services. EOAs can send transactions to the network, such as transferring funds, interacting with smart contracts, or deploying new contracts. Unlike contract accounts, which are governed by code, EOAs have full autonomy over their actions and assets.

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