Low Bitcoin ETF Fees Could Harm Crypto Exchanges

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Low Bitcoin ETF Fees Could be Bad News for Exchanges; ERC-404 Hybrid NFT Tokens Aim for EIP Push; Top 10 Upcoming Airdrops in 2024 Q1

The launch of numerous Bitcoin ETFs in January was a massive game changer for the consideration of crypto assets as an investment by the public. With the exception of Feb. 1, every single day from the date of the ETF launches on Jan. 11 to Feb. 5 saw daily volumes within the ETFs surpass $1 billion. This intensely competitive new asset class has witnessed fees being slashed to historic lows of around 0.2-1.5%, with some firms even offering to waive fees for a specific period or for a minimum dollar volume.

Meanwhile, Coinbase charges between 1.5% and 4% in crypto-related fees. Given that spot ETFs have very strong correlations with their underlying assets, switching to the ETF over the underlying asset is an innately rational choice made possible via discount brokerages such as Robinhood. This is a problem for Coinbase: around 17% of its revenue comes from Bitcoin transaction fees.

Where Coinbase does benefit from these ETFs is that it is a custodian for eight of the 11 new bitcoin ETFs. Given that the ETF issuers are required to physically hold the underlying asset, the company should make around 0.1-0.15% in custodian fees — a significantly smaller amount than what it collects from transactions of the underlying asset.

The only silver lining is that “crypto-native” proponents who consider crypto as a “parallel” alternative to the world of fiat currencies will likely continue to own their cryptocurrencies directly through the exchange. However, given the number of investors who hold Bitcoin as an investment asset translatable to fiats as and when needed will likely be small and continue to shrink, the likely dominant paradigm being set in place is that the “crypto native” is poised to continue to diminish in their dominance of the crypto marketplace.

Coinbase Chief Operating Officer Emilie Choi stated during the company’s third-quarter earnings call that Coinbase doesn’t plan to reduce transaction fees — and it seems like they weren’t anticipating that many ETFs would be cleared for trading or that they would be so popular.

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ERC-404 Hybrid NFT Tokens Aim for EIP Push

An unofficial and experimental Ethereum standard dubbed “ERC-404” — proposed to become a hybrid of fungible and nonfungible tokens (NFTs) — is “working around the clock” to submit an Ethereum Improvement Proposal (EIP), according to one of its inventors.

Created by pseudonymous developers known as “ctrl” and “Acme” under a project called Pandora, the standard mixes the tech behind ERC-20 fungible tokens with ERC-721, which is used for one-of-one tokens — such as the NFTs in the Bored Ape Yacht Club (BAYC) collection.

However, despite the moniker, ERC-404 hasn’t been audited, and the “ERC” is in name only. 

getting an approved EIP is one of the more bureaucratic things you can do. It’s a lengthy process, there’s a lot of politics […] Usually, the process takes a couple of weeks.

ERC-404 developer ctrl

Ctrl was tight-lipped on who was working on the proposal, only that they have “had success with this before” and were “in a very good spot” to soon submit an EIP.

Top 10 Upcoming Airdrops in 2024 Q1

  1. Linea

Linea is a type 2 zero knowledge Ethereum Virtual Machine (zkEVM). So, the zkEVM replicates the Ethereum environment as a rollup and allows developers to build on it as they would on the Ethereum mainnet. 

  • Linea lets users deploy any smart contract, use any tool, and develop as if they’re building on Ethereum. For users, this enables the experience and security guarantees of Ethereum, also with lower transaction costs.
  • Linea is a ZK rollup powered by ConsenSys, which has raised an incredible $726M and has launched its mainnet to the public. 
  • They had already confirmed to reward early testnet participants, so it’s very likely that they would launch their own token in the future and do an airdrop to early testnet and mainnet participants. 
  • We, at Coinpedia, highly recommend that users do transactions on a regular basis to increase their chances of becoming eligible, like every month or week.
  1. zkSync
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It is a ZK rollup, a renowned trustless protocol that uses cryptographic validity proofs to provide scalable and low-cost transactions. It is all done on the Ethereum chain. It has raised a glorifying sum of $458 million from investors like Blockchain Capital and Dragon Capital. 

  • It performs the computation off-chain and stores data off-the-chain.
  • It is built on Ethereum and is super safe!
  • It uses Gitcoin passports and Sybil wallets to ensure proof of humanity thus adding an extra layer of security!
  1. Wormhole

It is a generic, cross-chain message transfer protocol made to carry out interoperability between heterogeneous chains like Ethereum, Solana, BSC, etc. It has raised $220 million from investors like Coinbase Ventures and Multicoin Capital. 

  • It is an open-source blockchain development platform connecting the decentralized web system.
  • It allows interoperability among different chains through the bridge app
  1. Berachain

Berachain is a highly performing EVM-compatible blockchain built on Proof-of-Liquidity consensus. Proof-of-Liquidity is a novel consensus mechanism that wishes to align network incentives, creating a strong sync between Berachain validators and the ecosystem of projects. 

  • Berachain’s technology is built on Polaris, a great blockchain framework for building EVM-compatible chains on-top of the CometBFT consensus engine.
  • It has raised a massive $42 million in funding from investors like Polychain Capital and dao5. It has also confirmed to launch of its own token, “BERA”. 
  • It has launched a testnet called Artio, and users who try out the testnet will likely become eligible for a BERA airdrop when the token is about to go live.
  1. Layerzero

It is an omnichain interoperability protocol designed for lightweight messages passing across different chains. Layer Zero provides a safe and guaranteed message delivery with configured trustlessness.

  • It has raised a total of $173.3 million in funding from many investors like Alameda Research and Andreessen Horowitz.
  • They confirmed about the token launch and users who are in touch with the dApps built on Layer Zero may get an airdrop soon in 2024 Q1!
  1. Metamask
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It is a browser extension that is about to launch its token soon! It offers all the facilities to manage the digital assets from one place.

  • It is an extension browser that has a user-friendly mobile app
  • It has features like a key vault, secure login, token wallet, and a token exchange. 
  1. Telos

It is a high-performance blockchain built on Antelope that supports Ethereum dApps for Defi services and products. 

  • It offers low gas fees and fast block generation.
  • Users can earn TLOS tokens by completing the quests
  1. Mintlayer

It is a layer 2 blockchain that leverages Bitcoin’s security for financial solutions, NFTs, and much more!

  • It shows off its great features like support for taxation and investment payouts. 
  • By referring friends, one might receive $5 million tokens in their exclusive airdrop.
  1. Tamadoge

Tamadoge is a play-to-earn space that features Tamadoge pets, virtual characters created as NFTs. Players can buy, sell and trade pets using TAMA tokens. 

  • It hosts group events where players can compete and earn rewards.
  • There has been great growth in TAMA tokens, thus indicating a promising future!
  1. Ambient

Ethereum has served as a site of prosperity to many projects! Ambient is one among them which has flourished on the Ethereum platform. It is a Decentralised exchange that allows two-sided AMMs. It boasts a raise of $6.5 million from investors like Circle and Naval Ravikant.

  • It is a zero-to-one decentralized trading protocol where the DEX is seated inside a single smart contract.
  • Transactions are cheaper, faster, and easier here
  • There are great liquidity rewards
  • Fair trading experience for all!
  • It is the only DEX to support concentrated (V3), ambient (V2), and knock-out liquidity in the same liquidity pool.