Happy Friday!

After a rough start to the week, it looks like we may be able to end Friday on a positive note thanks to the good vibes brought on by Kaito’s token drop. 

Oh, and we have the bonus of the SEC’s suit against Coinbase looking like it’s going to be dropped as soon as next week after both sides were able to come to an agreement for a full dismissal of the case.

So far it’s looking like a good day. Let’s hope for a peaceful weekend (we’re knocking on wood right now). See you bright and early Monday.

🔨 Bob the Builder

Let’s be honest: Ethereum’s not having a good time. Part of it, as I wrote yesterday, is due to the overall lack of momentum for altcoins. There’s also just a lack of positive sentiment — which is unlike what we’re seeing for bitcoin (even if it hovers below $100,000).

In my conversation with Amberdata’s Greg Magadini, one part that was left out of yesterday’s edition were his thoughts on ETH. 

“The drag on ETH, in my mind, is because the value proposition of EIP-1559 creating a supply burn was made invalidated, or was invalidated once everyone started building their L2s and app chains and having all the transactions process off Ethereum and settle back to Ethereum. So then you flip from a deflationary asset to an inflationary asset. That’s a fundamental reason for ETH going down,” he explained. 

In other words, ETH’s inability to regain momentum is not directly tied to the rest of the market right now — especially not the memecoin craze.

Okay so this wasn’t my most positive intro, but I actually wanted to take more of a positive look at Ethereum right now thanks to a Galaxy report from Vice President of Research Christine Kim.

The report is focused on what’s being built on Ethereum and is a nice refresher — or inside look — to see how projects are using it. 

Kim noted that over 50 non-crypto companies have built either on Ethereum or an Ethereum L2. That’s no small number, especially when you dig in and find that about 20 of them are financial institutions with 10 of those being banks. 

The biggest use case, which should come as no surprise to loyal Empire readers, is real-world assets. That’s where you have the financial institutions building and experimenting with tokenized assets — such as money market funds (think BlackRock or Franklin Templeton) or government bonds. 

As seen below, Ethereum more than doubles the number of RWAs issued by Ethereum L2 rollup ZKSync. 

Now I know that RWAs aren’t the sexiest use case for crypto — and I get it — but I think we can all agree that they show some of the promise of crypto for non-crypto natives (so long as we keep them away from the memecoins). 

But, okay, let’s move on to another use case Galaxy found: gaming on Ethereum L2s. 

NFTs haven’t made a comeback, which means that some of the companies that tried to get some crypto exposure through them stopped issuing them years ago. Fair enough. But Galaxy found that nowadays, there is a use case for NFTs for some non-crypto native companies and that’s gaming. 

“What is most notable about the ongoing investment and development of NFTs by non-crypto-native companies like Atari, Lamborghini, and Lotte’s Caliverse is that they are being developed in the context of a larger on-chain gaming application,” Kim wrote.

“This highlights how the scalability gains from L2s are helping to support crypto-native use cases that require frequent on-chain interactions like gaming among major retail brands and corporations,” she continued.

There are still a lot of questions and concerns about Ethereum and where it goes from here, and that’s something I’m sure we’ll be covering again soon. But Galaxy’s report shows that we’re still seeing a lot of building happening, and it’s attracted folks outside of crypto. And that, I think, is a small positive.

— Katherine

P.S. Help us build a better Empire and complete our short audience survey. Thank you!

With the US entering its most pro-crypto era yet, DAS NYC brings the voices shaping what comes next.

• Joseph Wang (Monetary Macro, FedGuy.com) – Former Fed trader on liquidity, market structure, and the macro forces shaping finance.

• Matt Hougan (Bitwise, CIO) – Leading the charge on institutional adoption of digital assets.

• Rich Widmann (Google Cloud, Global Head of Web3 Strategy) – Defining the infrastructure and legal landscape for crypto’s next phase.

Less than 20 VIP tickets left. Groups of 4-9 still save 15%.

DAS NYC is four weeks away. If you want a front-row seat, now’s the time to lock in.

📅 March 18-20 | NYC

Unless you live under a rock, you probably heard about the Kaito token drop yesterday. 

Vibes were pretty positive, it turns out people like to be paid to yap (and some of us — ahem, myself — are left with FOMO after not yapping to earn). But alas, I turned to two colleagues who did earn KAITO for posting. 

Lightspeed’s Jack Kubinec and The Drop’s Kate Irwin both earned roughly $200 of KAITO. Kubinec praised the project for understanding that folks didn’t want another social media site to post on to earn their yaps, and instead kept it on X — where parts of the crypto community are the strongest. 

Kubinec was lucky in that a thread of his went viral shortly after claiming his profile on Kaito, bumping him up to one of the top yappers briefly. However, he admitted that even his short-lived CT fame didn’t prompt him to post any more than usual.

For Irwin, the question is all about longevity. We’ve been through a few hype cycles now, and admittedly when it’s good, it’s great and when it’s bad, CT kind of feels desolate. Irwin told me that it’s hard to see people still posting about yapping and caring about it in six months.

The token, however, is holding on for now. Perhaps some of that is due to some of the shaming we’ve seen over on X.

Or perhaps this is finally the project that can break the cycle and we’ve finally solved the code for SocialFi. Only time will tell I guess.

And now you know.

Maybe David Sacks is right. Memecoins are collectibles.

If that’s true, then crime season suddenly gets an element of Pokémon GO. 

Like how you might wander through the park and catch Wigglytuffs and Psyducks, we could all frolic through Raydium and buy dead rugpulls collect souvenirs of all the memecoins that come and go. 

It’s a pain that memecoins have sucked so much air out of the room and it’s made for a ton of myopic takes. The supposed Yeezy token launch isn’t helping, either.

So, here’s some eyebleach: Of the major coin launches in the past few months, HYPE — tied to a project of substance in Hyperliquid — is outperforming the pack with steady price action. 

Around 60% of all perps volumes on DEXs flows through Hyperliquid right now, which is a stat the market obviously appreciates.

MORPHO, the lending app on Ethereum and Base, is otherwise ahead by 135% since its own launch a week or so before HYPE. 

That’s much better than BERA, PENGU and MOVE, which have lost between 24% and 38% since they started trading (BERA is staging a comeback as we speak). Morpho currently has $6.8 billion in deposits, up 160% in the past three months.

All well and good: Real projects might have a chance after all. 

The best part is, if you zoom out this analysis to include coins launched just a few months earlier, in August and October, it would be FARTCOIN dominating the chart, even after its 84% retracement.

Sometimes, ignorance is bliss.

— David

Last week, we asked: Do we need to stop focusing on the “crypto” of it all?

60% of you replied: “I don’t care as long as I make money.” How inspiring.

This week, we want to know: