[Weekly Xangle] Klaytn Burns Reserve Supply, Coinbase Launches Base, OpenSea Cuts Fee, TON Tokenomic

Xangle ResearchXangle

Feb 27, 2023

Translated by elcreto

Xangle’s Take on the Market This Week

The crypto market opened the week on an upbeat note on the back of the news about Hong Kong's crypto-friendly policies before profit-taking kicked in and started to erase much of the gains.
Of all the sectors, the Korea Crypto index rocketed 18%, significantly outperforming other sectors. The rally is considered largely attributable to Klaytn’s (+39%) proposal to burn much of its reserve supply.

Top Stories & Takeaways

Coinbase Launches Layer 2 Solution Base

Coinbase has announced the launch of Base, its own optimistic rollup solution built on the OP stack.
Stage 1 will launch in late 2023, and Stage 2 in 2024.
Coinbase will not issue a new token for Base and ETH will be used as the native gas token.
Base will be joining the Superchain, a comprehensive Ethereum L2 network being developed by Optimism.

Xangle’s Take: Coinbase’s massive user base, financial firepower, and network do bode well for the success of Base. Other L2 solutions like Arbitrum may not find the news as palatable as Optimism would have since Base will be merged into the Superchain and part of the fees will go to the treasury. A series of successes of L2 projects like GMX, GNS, and MAGIC are propelling the dominance of Ethereum. The outlook of L1s securing their competitive edge, most notably Solana and Stacks, remains promising.

Link: Coinbase Official Twitter Thread

Klaytn Proposes to Burn Reserve Supply

The Klaytn Foundation submitted a proposal to its Governance Council (GC), seeking to burn 5.28 billion KLAY of the reserve supply for tokenomics improvement.
After the vote takes place from Feb 22 to Feb 28, the proposal will be implemented on Mar 1 once passed.
Further, the remaining 2.0 billion KLAY will also be burned in their entirety if they fail to demonstrate the usage. This way, the burning of tokens looks set to narrow the gap between market cap and FDV.

Xangle’s Take: The significance lies in the fact that Klaytn’s tokenomics has begun to improve. Burning of the reserve supply following the suspension of KGF and KIR disbursement late last year has significantly subdued the risk of supply overhang. Tasks remain ahead though for this South Korean L1 project, such as technical competitiveness improvement and onboarding of killer content.

Link: Klaytn Medium Post

Mainnet

TON Coin’s Tokenomics Optimization and Ecosystem Expansion in Full Gear

Along with the passing of a 4-year freeze of inactive wallets, TON’s participation in UAE’s Hub71+Digital Assets aimed at new project acceleration will give a spur to TON’s effort to optimize tokenomics and expand the ecosystem.

Link: TON Tokenomics Optimization Proposal

Celestia Unveils Rollkit

Celestia released Rollkit, an open source modular framework that makes rollup appchain development easier.

Link: Celestia Blog

DeFi

Mastercard Set to Support USDC Settlements Online

Global payment giant Mastercard will allow users to make crypto payments in USDC at online merchants that accept Mastercard.

Link: Mastercard Press Release

NFT

OpenSea Introduces Changes to Its Policy

OpenSea announced major changes to its policy, which is primarily marked by slashing of transaction fees and creator royalties.

Link: OpenSea Official Twitter Thread

Regulatory Landscape

Judge Denies a Motion to Dismiss a Lawsuit Against NBA Top Shot NFTs

The U.S. District Court denied a request Dapper Labs filed for dismissal of the complaint against the company’s NBA Top Shot NFTs alleging that Dapper Labs sold unregistered securities.

Link: Cointelegraph Report | Reuters Report | District Court Decision and Order (PDF)

Huobi Mulls Moving Its HQ to Hong Kong

Off the back of Hong Kong’s introduction of crypto-friendly policies, not only Huobi but a slew of other crypto exchanges and projects are seeking to relocate their HQs to Hong Kong.

Link: Cointelegraph Report

South Korea’s Financial Regulator Launches Probe into Crypto Exchange Staking Services

Staking services provided by South Korea’s crypto exchanges that support KRW-denominated transactions came under the review of the Financial Supervisory Service (FSS) of South Korea.

Link: Coingeek Report

Macro/Industry/Corporate

Coinbase Releases Q422 Earnings

Coinbase reported fourth quarter revenue of $629 million and loss of $2.46 per share, beating the consensus estimate.

Link: Coinbase Q422 Shareholder Letter (PDF)

Previous Xangle Weekly Reports

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