This Week's Newsletter - Case study on Alephium, Main News of the Week, $XEL Moon or Dust & Zoom on DAG
Weekly Alpha
This edition is available as an AI-generated Podcast. ⭡
Unless explicitly mentioned, there is no collaboration with the projects mentioned in this edition.
GM Frens,
Bitcoin has broken the symbolic $100,000 mark!
Finally this day has arrived.
Thank you for sharing this journey with me!
This historic milestone is sending waves of optimism throughout the ecosystem. However, Bitcoin's dominance has slightly decreased to 55%, signaling a potential start of a liquidity shift. Investors are now rotating toward altcoins, sparking renewed interest and opportunities across a broader spectrum of projects.
One notable trend is the resurgence of "Dino Coins" like XRP and Cardano. These large-cap tokens, long considered stalwarts of the market, are benefiting from what analysts are calling the memory effect. Many retail investors, especially those who entered the space during the previous bull run, are returning to these familiar names, drawn by their strong historical performances. This effect highlights an interesting asymmetry: while newer projects and narratives like DePIN and Layer2 solutions are flourishing, many of these investors remain focused on older, established tokens.
Meanwhile, Solana continues to demonstrate its resilience. Despite the cooling off of interest in meme coins, Solana’s ecosystem remains vibrant, driven by a strong developer community, a loyal user base, and consistent fee generation. This resilience highlights Solana’s ability to maintain relevance even as narratives evolve, positioning it as a key player in this market cycle.
Ethereum, too, is making waves. Its fundamentals remain solid, adoption is growing, and the prospect of ETH breaking above the $4,000 resistance level could unlock new price discovery (Edit: ETH has finally reached the $4K again). As the market shifts, Ethereum’s role as the backbone of DeFi and NFT innovation keeps it at the center of investor interest.
Narratives are everything in crypto, and the current market is no exception. Tokens and projects that align with hyped narratives are seeing inflows of capital, proving that being at the right place in the right story is often just as important as technical fundamentals.
This brings us to one of the most exciting and underexplored narratives: DAG Tokens (Directed Acyclic Graphs). DAG-based solutions offer a fresh approach to blockchain infrastructure, tackling scalability, decentralization, and energy efficiency in innovative ways.
This week, we’re diving deep into this narrative to unpack its potential and why it’s drawing increasing attention.
Before we dive in this Week’s Newsletter
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Here’s what you can expect in this week’s issue:
Case Study on Alephium, showcasing its role in advancing DAG technology.
Main News of the Week, with highlights on market trends and key updates.
Moon or Dust on $XEL, where we analyze whether this project is a hidden gem or hype-driven.
Zoom on DAG, breaking down this mechanic and why it matter for the future of blockchain.
Let’s explore what this means for the ecosystem—and what opportunities lie ahead.
Today's Newsletter is brought to you by Mantle:
Unleashing the Next-Gen Blockchain Ecosystem
📈 Mantle is redefining what it means to be a sustainable, modular blockchain, combining innovative staking mechanics with a rapidly expanding ecosystem.
Opportunities with Mantle:
✨ Massive TVL Growth:
▫️ $2.16B+ TVL on Mantle Network
▫️ $1.72B+ TVL on mETHProtocol (the 4th largest ETH Liquid Staking Protocol by TVL)
▫️ $1.17B+ TVL on IgnitionFBTC✨ Record-Breaking Momentum: Surpassing previous peaks—Mantle’s ecosystem is thriving more than ever.
✨ A Bullish ETH Narrative: With ETH showing strength during market corrections, it’s time to shine for Ethereum’s Ecosystem—and Mantle stands out as one of the fastest-growing Layer2 solutions.
What's Driving $MNT’s Momentum?
🏆 Mature Ecosystem: The successful launches of $mETH, $cmETH, $COOK, and $FBTC have transformed Mantle into a fully-fledged ecosystem.
💸 Undervalued Opportunity: $MNT currently trades at $3.5 Billion Mcap (according to CoinGecko)—up 50% since Nov 5th but still 25% below its previous peak in April.
With a more mature ecosystem now, there’s significant upside potential.
What Are $mETH, $cmETH, and $FBTC?
→ $mETH: The liquid staking solution for ETH on the Mantle Network. It allows users to stake ETH and earn sustainable yields while maintaining liquidity. With $1.72B in TVL, it’s now the 4th-largest ETH Liquid Staking Protocol.
→ $cmETH: Built on top of $mETH, this enables liquid restaking, allowing users to compound rewards by earning $COOK tokens. With over $500M in TVL, it’s rapidly gaining traction.
→ $FBTC: Developed by Ignition, $FBTC is an omnichain Bitcoin asset pegged 1:1 to BTC. It enhances Bitcoin’s accessibility within DeFi and has already amassed $1B+ in TVL.
Ecosystem Tokens: $COOK and $MNT
💎 $COOK: The governance and rewards token central to Mantle’s staking ecosystem. It powers high-yield farming campaigns tied to $mETH and $cmETH, aligning user incentives with network growth.
💎 $MNT: Mantle’s foundational asset, reflecting ecosystem growth, adoption, and modularity. $MNT has shown strong price recovery, and its expanded utility within staking and DeFi positions it as a key asset in the ongoing bull cycle.
Key Achievements to Highlight:
▫️ $mETH: Now the 4th-largest liquid staking token with $1.72B in TVL.
▫️ $cmETH: Surpassed $500M in TVL, providing users with innovative restaking opportunities.
▫️ $FBTC: Over $1B in TVL, offering new utility for Bitcoin in DeFi.
Why Mantle Stands Out
Mantle’s restaking ecosystem is designed to deliver the best yield opportunities, deepen liquidity, and enhance user access to DeFi. The interplay between $mETH, $cmETH, and $FBTC creates a comprehensive ecosystem where all components synergize to fuel growth.
🚀 With ETH Beta Season around the corner, it’s time to pay attention to $MNT.
1/ Case Study: Alephium – A Scalable and Energy-Efficient Layer1 Blockchain
Origins and Goals
Founded in 2018 in Switzerland by a team of blockchain and cryptocurrency experts, Alephium was created to address the limitations of traditional blockchains like Bitcoin and Ethereum. Its mission is to develop a scalable, decentralized, and secure blockchain that overcomes key challenges such as energy consumption and scalability.
Alephium seeks to resolve these issues by combining innovative technologies, making it one of the most promising next-generation Layer1 solutions.
Technology: Solving the Blockchain Trilemma
Alephium claims to have resolved the blockchain trilemma, which posits that decentralization, scalability, and security cannot coexist in a single blockchain. Alephium achieves this through a blend of advanced technical features:
a) Security
UTXO Model: Borrowed from Bitcoin, this model ensures secure asset management.
Proof of Less Work (PoLW): An eco-friendly consensus mechanism that reduces energy consumption by integrating computational power with token burning. Once the network reaches 1 exahash per second, PoLW will become fully active.
Energy Efficiency: PoLW makes mining less resource-intensive while maintaining security.
b) Scalability
BlockFlow Sharding: Alephium divides its blockchain into "shards," enabling parallel transaction processing. This currently allows the network to handle over 400 transactions per second (TPS), with potential scalability up to 10,000 TPS.
DAG Technology: Alephium uses Directed Acyclic Graphs to link blocks efficiently, preventing double spending.
c) Decentralization
PoLW fosters decentralization by enabling mining even with a simple gaming PC.
While the increasing prevalence of ASIC miners raises concerns, decentralization remains a central priority for the team.
Tokenomics of ALPH
Alephium’s native token, ALPH, is integral to the network's functionality and has several utilities:
Key Features
Utility: Used for transaction fees, smart contract execution, staking, and governance.
Burn Mechanism:
100% of transaction fees are burned, creating a deflationary effect.
PoLW also burns tokens, reducing supply over time.
Token Supply
Total Supply: 1 billion tokens.
Distribution:
140 million tokens were pre-mined at mainnet launch.
860 million tokens will be mined over 80 years.
Vesting: Most tokens for the team and ecosystem are already distributed, with a focus on long-term development.
Exchange Listings
ALPH is currently available on a limited number of exchanges. A listing on major platforms like Binance or OKX could drive significant price growth.
Ecosystem: Building Activity and TVL
Alephium’s ecosystem is still in its early stages but shows promising growth with a Total Value Locked (TVL) of $26 million, which is encouraging for a project with a market cap of $180 million.
But is still a TVL Ratio > 6, which does not fall into the undervalued category.
Of course this is not the only indicator to take into account.
Developer Initiatives
Hackathons: Events like the "Wise or Serious" hackathon, offering $20,000 in prizes, have spurred dApp development.
Notable Projects:
Altrad: A perpetual DEX that won the hackathon’s top prize.
My.fi: A platform tokenizing mining infrastructure via NFTs.
Invariant App: A multi-chain DEX leveraging concentrated liquidity, akin to Uniswap V3.
Alephium Bank: A decentralized lending platform powered by the stablecoin ABD (Alephium Bank Dollar).
Eleecum Finance: A DeFi platform offering advanced liquidity pools and governance mechanics.
Conclusion
Alephium stands out as a technically advanced blockchain with the potential to resolve key limitations of existing networks. Its scalable sharding, eco-friendly PoLW consensus, and developer-friendly ecosystem give it a competitive edge.
However, success hinges on its ability to:
Attract developers to expand its ecosystem.
Secure strategic partnerships and ecosystem adoption.
Achieve broader exchange listings to increase liquidity and awareness.
With strong fundamentals and a focus on innovation, Alephium is positioned as a contender in the rapidly evolving blockchain space.
2/ Crypto and DeFi News :
💨 MARA rolls out advanced ASIC recycling with wind power
MARA, formerly Marathon Digital, acquired a wind farm in Hansford County, Texas, with 114 MW of operational capacity and 240 MW of interconnection capacity. The energy will exclusively power a data center for Bitcoin mining using recycled, last-generation ASICs through MARA’s new Advanced ASIC Retirement Initiative. By leveraging renewable energy and repurposing hardware, MARA aims to cut production costs and reduce its environmental impact. The move aligns with its push for vertical integration and increased sustainability in Bitcoin mining.
Thought: This is a significant step for MARA and the broader Bitcoin mining industry. Utilizing excess wind energy and retired ASICs highlights how miners can adapt to regulatory and environmental scrutiny while driving operational efficiency. It’s also a testament to how renewable energy can reduce mining's carbon footprint, potentially making Bitcoin more palatable to critics. As energy sustainability becomes central to Bitcoin’s narrative, innovations like these could redefine mining's role in clean energy initiatives. Could Bitcoin mining soon become a key player in stabilizing renewable energy grids?
🏁 Binance leads crypto exchanges in Bitcoin deposits in 2024
A CryptoQuant analysis reveals that Binance led cryptocurrency exchanges in Bitcoin deposits in 2024, with an average daily deposit increase of 2.77 BTC. This surpasses Kraken's 0.56 BTC and Coinbase's 0.41 BTC gains. The trend aligns with rising institutional participation, as average Bitcoin deposits across exchanges surged from 0.36 BTC in 2023 to 1.65 BTC in 2024. USDT deposits also saw exponential growth, with Binance recording a peak daily USDT deposit of $303,000, the highest since 2022.
Elections and ETF approvals fueled this growth, with institutional inflows bolstered by BlackRock’s iShares Bitcoin Trust, now holding over 500,380 BTC (2.3% of global supply).
Thought: Binance’s dominance in Bitcoin deposits reflects its growing appeal among institutional investors and corporate clients. The surge in USDT deposits also highlights stablecoins' role as an institutional gateway. With spot Bitcoin ETFs and political shifts favoring crypto, institutional adoption may enter a transformative phase, solidifying Bitcoin as a mainstream asset. Could this institutional momentum redefine market dynamics, favoring exchanges like Binance?
📈 Ripple's XRP token flips Solana's market capitalization
Ripple's XRP token overtook Solana in market capitalization, becoming the fourth-largest cryptocurrency as of Dec. 1, 2024. XRP’s market cap reached $122 billion, compared to Solana's $111.9 billion (CoinMarketCap). This milestone coincided with XRP hitting a seven-year price peak of $2.19 following a rally starting in November.
Contributing factors include Ripple's strategic partnerships, ongoing XRP ETF filings, and the launch of tokenized products on the XRP Ledger. Additionally, speculation about Elon Musk’s potential investment in Ripple and XRP bolstered market enthusiasm. November also saw asset managers like 21Shares and WisdomTree push for XRP-focused ETFs, signaling increasing institutional interest.
Thought: XRP flipping Solana in market cap underscores its renewed institutional backing and evolving use cases. ETF optimism and tokenization initiatives could enhance XRP’s utility, differentiating it from Solana's tech-driven ecosystem. With XRP gaining momentum, this development might amplify the race for dominance among blockchain networks in asset tokenization and DeFi. How will Solana respond to maintain its competitive edge?
💵 Trump admin unlikely to change Tornado Cash approach
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) is under scrutiny following a Nov. 26 appellate court decision stating that it overstepped its authority by sanctioning Tornado Cash’s immutable smart contracts in 2022. Coinbase-backed plaintiffs are challenging the sanctions, with potential policy shifts expected in 2025 under the Trump administration. Consensys’ senior counsel Bill Hughes suggested the Treasury might adopt the court’s analysis under Trump’s leadership but warned that current sanctions on Tornado Cash are unlikely to change before 2025.
Thought: The court’s ruling highlights a turning point in how immutable smart contracts are regulated. If the Trump administration aligns its policies with the judgment, it could set a precedent limiting government overreach in DeFi. However, uncertainty over enforcement remains, leaving projects like Tornado Cash in regulatory limbo. This situation underscores the critical need for clearer legal frameworks for decentralized technologies.
💰 Hyperliquid’s HYPE token surges 60% after billion-dollar airdrop
Hyperliquid, a high-speed Layer1 blockchain, conducted one of the largest DeFi airdrops in history on Nov. 29, distributing 310 million HYPE tokens to its community. The initial valuation of $3.90 per token placed the airdrop’s worth at $1.2 billion. Within 12 hours, the token surged 63%, reaching $6.16, with a market cap nearing $2 billion. Hyperliquid allocated 31% of the total token supply in this event, with additional allocations for emissions, rewards, and contributors, while private investors and centralized exchanges were excluded from the distribution.
Thought: Hyperliquid’s airdrop represents a pivotal moment in the crypto industry, showcasing an innovative approach to token distribution and community engagement. By allocating 76% of its total supply to the community, including 31% in its initial airdrop, Hyperliquid exemplifies a model of decentralized ownership. Its emphasis on rewarding early adopters and active participants through metrics like trading volume and a referral program underscores a focus on long-term ecosystem building. Additionally, the opacity of the point-based distribution method ensured fairness, mitigating the influence of large players and fostering trust within the community. This strategy has not only driven token price growth but also set a benchmark for equitable practices, positioning Hyperliquid as a source of inspiration for future DeFi projects.
3/ 🌑 Moon or Dust: Xelis, the Next-Gen Blockchain Contender
Xelis, a blockchain Layer1 project, is making waves with its innovative Block DAG architecture, privacy-focused encryption, and fair launch ethos. But does this project have what it takes to reach the moon, or will it ultimately gather dust? Let’s dive in.
🌟 Xelis’ Key Strengths
1. Block DAG and Scalability
The Block DAG (Directed Acyclic Graph) structure allows for parallel block creation, increasing network scalability significantly.
Xelis has reached a practical performance peak of 12 blocks per second, positioning it as one of the fastest networks among emerging blockchain solutions.
To maintain order and efficiency in its DAG:
Normal Blocks are created under standard conditions.
Side Blocks handle high demand but offer reduced rewards to avoid over-mining.
Syn Blocks serve as high-difficulty checkpoints to synchronize the network.
Orphan Blocks are rejected due to insufficient network difficulty, ensuring the system remains secure and efficient.
2. Advanced Privacy Through Encryption
Xelis employs Partial Homomorphic Encryption (PHE) to encrypt balances and transaction amounts, while addresses remain visible —> This ensures high privacy without compromising network performance.
Transactions are verified using Zero-Knowledge Proofs (ZKPs), enabling validation without revealing sensitive details like sender identity or transaction amounts.
3. Decentralized and Accessible Mining
The network supports GPU and CPU mining, promoting accessibility and decentralization.
The Xelis HV2 update shifted focus towards CPU mining, reducing the influence of ASICs and high-powered GPUs to ensure fairer participation.
4. Smart Contract Integration
Xelis features its own Rust-based virtual machine (VM), enabling decentralized application development.
This capability positions Xelis as more than just a transactional blockchain—it could host an entire ecosystem of dApps.
🚀 Growth Indicators
Adoption and Community
Xelis’ user base and activity are growing steadily, with increasing numbers of accounts, active addresses, and transactions.
Over 180,000 transactions have been processed in just two months, averaging 1,250 daily.
Tokenomics and Fair Launch
The native token, XEL, launched with no pre-mine, VC allocation, or team reserves, ensuring decentralization.
Its hard cap of 18.4 million tokens, decreasing block rewards, and developer fund (10% of block rewards, reducing to 5% after 1.5 years) create a sustainable economic model.
🔑 Challenges to Overcome
1. Youthful Ecosystem
At only a few months old, Xelis remains largely untested in real-world high-stress scenarios and market downturns.
2. Exchange Accessibility
XEL is currently only listed on niche exchanges like Tradedog and Zegex, limiting exposure and liquidity.
3. Smart Contract Development
While the VM is functional, widespread adoption of Xelis’ smart contract platform is still in progress.
4. Centralized Developer Fund
Although the mining rewards allocated to the development team support active growth, transitioning to a DAO-governed fund is critical for long-term decentralization.
💡 Moon Potential
Scalability and Privacy: The Block DAG system and encryption protocols position Xelis as a unique contender in the Layer1 space.
Decentralization: Its fair launch, accessible mining, and growing community provide a solid foundation for trust and long-term growth.
Ecosystem Growth: The development of dApps and integration into broader blockchain ecosystems could unlock substantial value.
💀 Dust Risks
Network Effects: Competing with established blockchains like Ethereum and Solana may hinder Xelis’ ability to attract developers and users.
Liquidity Constraints: Without listings on major exchanges, adoption could remain limited.
Sustainability: Reductions in mining rewards and reliance on the developer fund could challenge the network’s financial model if not managed properly.
Verdict:
Xelis combines cutting-edge technology with a community-focused ethos, positioning it as a high-potential moonshot in the blockchain space. However, its youthful stage and limited exchange presence pose hurdles to broader adoption. If Xelis can scale its ecosystem, secure better exchange listings, and maintain decentralization, it has a strong chance of success.
For now, Xelis is leaning toward moon but must prove its resilience in the long run. 🌕
4/ Future Trends: Directed Acyclic Graphs (DAGs) and Their Impact on Crypto
As blockchain technology matures, its limitations—scalability, transaction speed, and energy efficiency—become increasingly evident. Enter Directed Acyclic Graphs (DAGs), an alternative structure for recording transactions. DAGs present exciting opportunities for faster, more efficient systems while opening the door to revolutionary applications.
We already spoke about Kaspa a few weeks ago, so today i chose to standout another very promising project utilizing DAG : Hedera Hashgraph (HBAR).
What is a DAG in Crypto?
DAG's are data structures where transactions are represented as vertices, connected through edges in a non-cyclic flow. Unlike traditional blockchains, which rely on sequential blocks:
Transactions in a DAG can occur simultaneously without waiting for previous confirmations.
Nodes validate transactions through lightweight Proof-of-Work (PoW), reducing competition among miners.
The structure inherently supports high transaction throughput and minimizes energy consumption by eliminating traditional mining.
DAGs resemble a tree or graph rather than a chain, positioning them as a scalable and eco-friendly alternative to blockchains.
How Does a DAG Work?
Simultaneous Transaction Validation: DAG networks allow multiple transactions to be validated at once. Each new transaction references previous transactions, ensuring continuity and order.
Tip Selection Algorithms: These select transactions (or "tips") based on factors like weight (the number of confirmations) to prevent double-spending.
Energy Efficiency: Unlike blockchains, which require resource-intensive mining, DAG networks rely on lightweight validation processes.
HBAR: A DAG Success Story
Adoption Milestones
Hedera Hashgraph is leading the way in DAG-based solutions :
Global Applications:
A national stock exchange tokenized its assets on Hedera.
Property ownership records are managed via Hedera in a country’s legal system.
National currencies and IoT applications, including the first post-quantum satellites, operate on Hedera.
Low-earth orbit flight data and energy usage tracking by global organizations rely on its DAG-powered network.
Market Confidence:
Recently, HBAR surpassed $8 billion in market capitalization, a testament to growing market trust.
Efficiency and Speed
Hedera’s DAG-based architecture enables up to 10,000 transactions per second, compared to 7 TPS for Bitcoin and 20-30 TPS for Ethereum.
Near-zero fees and low energy requirements make it ideal for microtransactions and enterprise use cases.
Institutional and Regulatory Alignment
Compliance with ISO 20022, a global standard for financial messaging, positions HBAR as a top candidate for traditional finance integration.
Potential partnerships with major players like Ripple could further expand its stablecoin and financial services footprint.
Market Signals
Accumulation by whales: Recent large transactions, including a single transfer of 37 million HBAR with negligible fees, signal confidence in its long-term potential.
Price Outlook: Analysts predict HBAR could reach $0.44, supported by technical analysis and growing adoption.
DAG vs. Blockchain: A Comparative Lens
While blockchain excels in security and decentralization, DAG’s strengths in scalability and efficiency make it a strong contender for future innovations.
Future of DAGs in Crypto
Enhanced Scalability: DAG’s ability to handle high volumes of transactions positions it as a backbone for IoT ecosystems and real-time data applications.
Energy and Cost Efficiency: In an era of increasing environmental awareness, DAG’s low energy footprint is a major advantage.
Real-World Integration: Projects like HBAR demonstrate how DAGs can power industries like finance, governance, and supply chain management.
Conclusion
Hedera Hashgraph showcases how DAG technology can evolve beyond theory to deliver scalable, efficient, and eco-friendly solutions for real-world challenges.
Other notable DAG-based projects include Xelis, which leverages its Block DAG architecture for scalability and innovative features like Side Blocks and Syn Blocks to manage network congestion. Similarly, Alephium combines DAG technology with stateful smart contracts, enhancing both scalability and functionality.
These projects illustrate the versatility of DAGs in addressing blockchain's most pressing limitations.
DAGs, and projects like Hedera Hashgraph, Xelis, and Alephium, represent a leap forward in crypto technology, addressing scalability, speed, and environmental concerns.
However for now it’s still considered as a side technology of the Blockchain, that is not yet a strong Narrative. It could also remain forever a side technology.
That’s it for today frens!
Thank you for sticking around, your future self will thank you. You can follow me on X @CryptoShiro_.
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