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28th June 2024 > > SOL & Base.


tl;dr

The next step towards a spot SOL ETF has been taken by VanEck. Coinbase’s partnership with Stripe stakes out the moral high ground with the added bonus of being a body-blow to supporters of Choke Point 3.0.


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Following last night’s somewhat unsettling performance from Joe Biden in the first of the presidential candidates debates, SOL based political meme coin OBEMA (Mechelle Obema) is up 30% or more, as the possibility of the Democrats ditching Biden for the former First Lady gains a little more traction.


Curious Cryptos’ Commentary – Spot SOL ETF

VanEck has filed an S-1 for a spot SOL ETF.


SOL has been previously characterised as one of the (many) “ETH killers”. I don’t know about that, but it is very fast, and it is very cheap. It isn’t as fast as it is claimed (I see 1,000 TPS as a typical measurement, which is nowhere near the TPS of VISA) and it isn’t as cheap as it was once portrayed. But in comparison to many other blockchains, it outperforms and by some margin. It is no secret that the CC Treasury has allocated a significant portion of its holdings to SOL.


Matthew Sigal, head of Digital Assets Research at VanEck has a very cheering take on SOL:


“We think this combination of high throughput, low fees, robust security, and a strong community vibe makes Solana an attractive option for an exchange-traded fund, offering investors exposure to a versatile and innovative open-source ecosystem.”


“We believe the native token, SOL, functions similarly to other digital commodities such as BTC and ETH.”


“SOL’s decentralized nature, high utility, and economic feasibility align with the characteristics of other established digital commodities, reinforcing our belief that SOL may be a valuable commodity with use cases for investors, builders, and entrepreneurs looking for alternatives to the duopoly app stores.”


SOL’s price reacted favourably during the minutes following the news.


A spot SOL ETF will face the same problem, at least at first, as a spot ETH ETF.


There will be no staking allowed within the ETF.


This means for ETH ETFs there is a 3% drain per annum and for SOL 5%.


Once you take compounding into effect, and consider a broad range of much higher crypto prices three to five years into the future, ETF buyers will have to keep adding to their stash monthly to ensure the ETF performance is comparable to owning the underlying in cold storage, whilst staking to keep the network secure.


I cannot stress enough how important it is to be aware of this flaw that will apply to all ETFs of PoS coins until such a time as the SEC relents, with freedom and liberty reinstated as important principles (aka the day Gensler resigns) to allow staking within the ETF.


Curious Cryptos’ Commentary – Coinbase and Stripe

Stripe is an online payments processor that was a very early adopter of cryptos until forced by harsh regulations and no little political pressure to back-off.


Coinbase and Stripe are now in partnership to offer cross-border remittances of fiat using USDC on Base as the conduit. This development strikes at the very heart of the outrageous fees that TradFi banks charge to some of the world’s poorest diaspora sending money home to loved ones whilst working overseas. This specific use-case for cryptos occupies a higher moral ground than any TradFi institution or product could ever hope to aspire to, and makes all crypto enthusiasts very proud.


The same technology will be used to on-ramp fiat to the crypto world for users of Base, and Coinbase, aiding crypto adoption, boosting Coinbase’s long-term prospects, and making Warren and her anti-crypto army all start gnashing their teeth in unison.

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