April Crypto Narrative Outlook: Shapella, Layer 2, NFTs, and Gate.io Web3 Platforms
April is here, BTC has been trading somewhat sideways, and Ethereum’s Shapella upgrade is just cresting over the horizon. But there’s still much more going on, and new narratives are finding attention as we enter the second quarter of 2023.
Ethereum’s big splash
First and foremost, Shapella, the most anticipated Ethereum upgrade since The Merge, is scheduled for April 12. Launching as a combination of the Shanghai and Capella upgrades, it will enable validators to withdraw their staked ETH under certain conditions.
While some worry that the upgrade will lead to mass withdrawals, this is likely not the case. The Ethereum developers have implemented a queued withdrawal system, which means that all validators can’t withdraw en masse. On top of this, the system is designed to gradually increase the reward rate when validators exit, incentivizing new validators to enter.
In addition, the upgrade could help push innovations in DeFi, particularly with liquid staking protocols that rose in popularity due to providing a form of withdrawable ETH staking. These protocols will now have greater competition with staking directly on Ethereum and may have to adapt.
Arbitrum faces new challenges
After a successful airdrop of over $1B worth of ARB governance tokens, Arbitrum faced its first community governance proposal AIP-1. What followed was a ton of controversy as the proposal to allocate 750M ARB tokens for the Arbitrum Foundation’s operational costs was overwhelmingly voted against. Before the vote ended, the Arbitrum Foundation had already spent a small portion of the 750M tokens.
The Arbitrum Foundation took the stance that the vote was just a formality to inform the community, indicating that poor communication had caused the misunderstanding. On the other hand, many ARB holders are questioning the governance capabilities of their ARB tokens. As the largest Layer 2 ecosystem on Ethereum with 65% of the market share, it will be interesting to see how the Arbitrum Foundation and ARB token holders can mend their relationship as we go deeper into the month.
Decentralized exchanges get a handout
In terms of decentralized finance, Uniswap, the world’s largest decentralized exchange, made its V3 code free for other exchanges to use. Almost immediately, other decentralized exchanges, such as PancakeSwap (CAKE), launched their own V3 versions based on Uniswap V3. Meanwhile, Trader Joe (JOE), a competitor similar to but not based on the Uniswap V3 codebase, is experiencing a much faster growth rate.
Blur’s trend continues, Yuga Labs’ x Gucci
Entering April, Blur continues to hold the number one NFT marketplace in volume-based market share, seeing over $2 billion worth of NFTs traded in March alone. Its model of reducing fees to an absolute minimum while incentivizing trades through BLUR token rewards will likely continue dominating the NFT market.
Yuga Labs, the team behind some of the most popular NFT collections, such as Bored Ape Yacht Club (BAYC), announced a new partnership with luxury mega-brand Gucci. The two will release the KodaPendants collection, with each of the 3,333 NFTs paired with a silver Gucci necklace. KodaPendant NFTs will only be available for purchase with ApeCoin, Yuga Labs’ native cryptocurrency. This could bring some positive attention to the token. Still, it could be counteracted by volatility from an upcoming April 17 unlock of over $60 million worth of ApeCoin held by Yuga Labs and its team.
Hong Kong’s crypto regulation push
As one of the world’s financial hubs, Hong Kong’s shift towards more crypto-friendly regulation is attracting blockchain and crypto companies vying to create the next big advancements in Web3. This has led to Chinese-based cryptocurrencies such as Conflux (CFX) experiencing massive gains this year. Going further into Q2, more good news about Hong Kong’s push to become the world’s Web3-hub may lead to more price action.
Web3-ready tools to ready you for Web3
In line with other companies looking to ramp up their development in decentralized tech, Gate.io recently launched two new Web3-ready platforms this year, the Gate.io Web3 Wallet and Gate Web3 Perpetuals.
Using zero-knowledge tech that enables super-fast and private on-chain perpetual contract trading, Gate Web3 Perpetuals is a decentralized perpetuals exchange that brings the familiarity, speed, and fully-featured experience found on centralized exchanges to the blockchain. As a result, traders benefit from a transparent and self-custody trading experience with all the security of blockchain and zero-knowledge rollups.
Complementing the release of its perpetual DEX, the Gate.io Web3 Wallet is designed and optimized for multi-device usage in the emerging world of Web3. Users can navigate decentralized applications with self-custody crypto and seamlessly transfer data between any device, all secured through multiple layers of encryption. The wallet supports a multitude of chains, including Ethereum, Polygon, BNB Chain, GateChain, Heco, Cronos, Solana, and more.