well said.

👨💻How Shanghai's Ethereum network update will affect liquid-stacking platforms?

The second-capitalised cryptocurrency's network is expecting a major upgrade this March, with #ETH added to the stack on Beacon Chain in late 2020 finally available for withdrawal (source). However, this will not happen at the same time due to network security concerns.

In order to become a validator of the Beacon Chain network, each member had to deposit 32 #ETH to get started, deposits started being accepted in December 2020, and they were blocked indefinitely. Now, thanks to the forthcoming Shanghai update and the "EIP-4895: Beacon Chain Push Withdrawals as Operations" initiative, node owners will have the opportunity to withdraw their assets. The order of #ETH withdrawal will be determined by several different factors, including the full number of validators and churn restrictions designed to ensure network stability and security.

Once a validator has passed through the exit queue, it will enter the withdrawal period. This period is currently estimated to be 27 hours. However, it could take up to 3 months if a third of the validators want to exit the stack completely. Thus, with an estimated number of validators of half a million users it could take months to withdraw blocked Ethereum.

However, even before #ETH developers announced plans to upgrade Shanghai's network, there were providers that allowed users to send Ethereum stacking through their platform, receiving synthetic assets in return in proportion to the funds they contributed. These are liquid-stacking services, with Lido Finance (#LDO), Rocket Pool (#RPL) and Frax Finance (#FRAX) being the best known among them.

For example, a user decides to use the services of Lido Finance, by locking their #ETH on the platform, they get a tokenized version of their asset in the form of #stETH token in a 1:1 ratio. The latter can be used in parallel to generate additional income in DeFi-protocols, without losing earnings from the stacking of their funds. At the same time, liquid-stacking services could be used to pass the entry barrier of 32 #ETH to launch their own node in the Beacon Chain, which also contributed to the demand for these platforms.

Incidentally, the management tokens of DeFi-protocols that provide a liquid-stacking service have grown by tens of per cent since the beginning of the year. Thus, according to TradingView, #LDO increased in value by 96%, Rocket Pool (#RPL) coin increased in value by 60% and #FRAX asset increased in value by 105%. According to DefiLlama, the average increase in the total amount of blocked funds in liquid stacking protocols over the last month was around 30% (source). This means that capital is being actively channelled to these platforms.

The question arises, what impact will the Shanghai update have on liquid-stacking protocols in relation to the possibility of #ETH withdrawing from the Ethereum 2.0 smart contract? Firstly, it should be understood that validators have accumulated Ethereum that is not involved in any way in staking, i.e. the staking interest accrues on the blocked 32 #ETH, and all the ether received as rewards is not used effectively.

Therefore, it is very likely that the surplus #ETH to be withdrawn from the Beacon Chain will go to liquid staking services. Secondly, the entry threshold of 32 #ETH, which is about $48,600 at the time of writing, is still a barrier for many users, yet they can take advantage of the alternative provided by DeFi-protocols.

Thirdly, the strength of the platforms in question remains the issuance of a synthetic asset to the user for the cryptocurrency directed to the stack, which in turn creates an opportunity for additional income. Thus, for the combination of the reasons mentioned, the upcoming Ethereum network upgrade will lead to an increase in demand for liquid-stacking platforms, which will positively impact the price dynamics of their management tokens.

What do you think of the material?

The most promising cryptocurrency of 2023

What should a crypto investor invest in? Bitcoin? In ether? In doge?

The answer is given by renowned crypto investor Dan Gambardella, founder of Crypto Venture Capital: in Cardana, more specifically, in ADA.

Cardana is the blockchain platform co-founded by Ethereum co-founder Charles Hoskinson, so there are a lot of similarities to ether in general. ADA is this platform's internal cryptocurrency. The names are not coincidental - Gerolamo Cardano was an Italian mathematician and Countess Ada Lovelace a British one. You could say this platform is a tribute to them.

Why this particular cryptocurrency? Because it has been trading around its high (+-$0.25 per coin) since September, which means that there has been steady demand for it. This means there is a strong interest in the Cardana platform from crypto investors - a similar story to Ethereum, which ended up being the world's second-largest cryptocurrency.

Everything, Hoskinson says, depends on the bulls (the big players) - if they start investing heavily in this crypto, it could grow by 1000% year-over-year and ADA could be at the top of altcoins (all currencies except bitcoin).

Let me say right away that this is not an investment recommendation, don't take it at face value, but study the issue. But it is worth remembering that earnings are best not in the usual currents, but in the uncrowded places.

👨💻Why is the capitalisation of cryptocurrency projects related to artificial intelligence (AI/II) growing?

Since early 2023, the popularity of OpenAI's chatbot has been one of the reasons for increased user demand for AI-related crypto-platform coins. ChatGPT is a neural network from US company OpenAI, which is a chatbot trained on a huge data set, capable of generating text from almost any field or programming code in different languages. Microsoft has previously invested about $1 billion in OpenAI, and is looking to acquire 49% of the company to integrate its technology into its own search engine, Bing, Office suite and Azure cloud infrastructure.

It should be noted that artificial intelligence in general is one of the most heavily funded sectors in the venture capital market. According to Crunchbase, investment in AI projects in recent years accounts for up to 10% of all venture capital invested, and last year AI startups around the world were invested to the tune of almost $70bn (source).

On 10 January, news broke of Microsoft's plans to invest up to $10bn in OpenAI in order to further integrate the startup's products into its services, which also favoured blockchain tokens of projects somehow related to AI development, with SingularityNET's #AGIX coin rising 20% against the US dollar in the wake of the announcement.

The tokens of projects united by the common idea of belonging to artificial intelligence have shown a significant increase in their value over the past 30 days, such assets have risen by more than 80% on average (source). Leaders among them were SingularityNET (#AGIX) up 310%, DeepBrain Chain (#DBC) up 190%, Fetch.ai (#FET) up 183%, AllianceBlock (#ALBT) up 145% and Ocean Protocol (#OCEAN) up 98% (according to Tradingview).

Firstly, we should note that AI & Big Data sector's share of the total cryptocurrency market capitalization is only 0.14%, and the heaviest project in this area is SingularityNET with capitalization of $235 million, i.e. it did not require large infusions of funds initially to create demand for the examined cryptocurrencies. Second, the popularity of these projects is primarily due to the success of ChatGPT rather than specific platform developments or products. Rather, it is growth for the future, and most startups have a lot of work to do to meet user expectations.

This means that in addition to mentioning the possibility of applying artificial intelligence to the software code of the protocols, a viable economic model is required, explaining the reasons for the value of the token, which will lead to increased demand for it in the future. For example, blockchain technology can be used to create decentralised data storage and processing networks that can be used to train and improve neural networks, an area Ocean Protocol is developing.

The concept of Autonomous Economic Agents (AEAs), promoted by the UK start-up Fetch.ai, also looks interesting. AEAs are systems based on machine learning algorithms that act on behalf of their owners in various economic activities. For example, agents can search for bargains in the cryptocurrency market, buy concert tickets or book hotel rooms.

I think that the opportunities that neural networks are currently demonstrating, creating a picture, an article on a chosen topic or a program code on demand, are only a small percentage of the open prospects of artificial intelligence technology. Therefore, it is safe to assume that the cryptocurrency industry's AI & Big Data sector will continue to grow in the coming years.

How long do you think the trend towards AI-related cryptocurrency projects will last?

The dot-com bubble

Let's continue our breakdown of the financial crises with the dot-com bubble, how investors literally went crazy because of the internet.

The Internet has a deep and interesting history. It began as a military and purely scientific development, and with the proliferation of personal computers it entered the big world. And by the '90s it was spreading like a virus, so handy was it. In 1995, 40 million people were connected to the Internet; by 2000, 400 million were, and by 2005, 1 billion were.

Of course, businesses and investors were very attracted to the Internet, and it really blew their minds. Various Internet companies sprang up like mushrooms after the rain - Elon Musk started with an Internet service provider Zip2 in 1995, Sergey Brin and Larry Page's Google was born in 1998, and in Russia it was Rambler in 1996 and Yandex in 1997. Search engines, maps, directories, forums and so on. The young companies promised investors that they would completely change the world (and on the whole, they did not lie), for which they received fabulous money.

Internet companies entered the stock market and immediately began to grow by hundreds of percent a year. The investors - most of whom were ordinary people without millions in their accounts - invested their money and rubbed their hands together in anticipation of a good old age. It would seem that the Japanese real estate crisis had only recently hit, there was already the Great Depression, the energy crisis of the 70s, but people sincerely believed that this time it would be different.

For a successful IPO, all the company had to do was add ".com" to its name, which in English sounds like "dot-com". Everybody thought it was another Internet company and ran to invest in it. A business plan? A model? Financial statements? Profits? Who needs it anyway! Bring in the cache and you'll get several times as much. That approach gave the NASDAQ index a 500% increase from 1995-2000.

Of course, the growth of the dot-com bubble was actively helped by the media. They saw the growth of Internet companies and actively trumpeted it - thereby enticing new players to inflate the bubble even more. Yes, there were plenty of innovative companies offering good business solutions, but there were also plenty of those who had nothing, but their shares were worth a lot. Sooner or later the bubble had to burst and it did on 10 March 2000.

We cannot say that any particular event caused the bubble to burst on that date, but rather a confluence of factors. In 1999, inflation began to rise in the United States and the Federal Reserve (Central Bank) began to raise its key rate, raising it from 4.75% to 6.5% in one year. By early 2000, credit became noticeably more expensive than it had been at the dawn of the dot-com boom. Investors and traders began to lose interest in Internet companies - and things took a sharp downturn. On March 10, 2000, the NASDAQ Composite reached a record 5132.52 points in the afternoon, but had already fallen 1.5 times by the end of trading.

The steep peak to the bottom began. Shares fell and fell every day, investors went bankrupt and companies closed. Only those who were really serious businesses survived. The index fell for the next 30 months, bottomed out at about 1,100 points, a 5-fold drop. It took NASDAQ a full 15 years to recover to 5,000 points.

The passion of investors for innovation died out, and the word "dotcom" became a dirty word, meaning an incomprehensible company demanding a lot of money for something "brand new". However, this stock market crash did not stop the development of the internet; it was still actively penetrating our reality. And let's be honest - we can no longer imagine life without it. Personally, I can't.

ChatGPT wrote an Eminem-esque rap about cats, and voice neural networks dubbed it

The chorus is really worth your while.

And what crypto coins are related to AI (artificial intelligence)?

Crypto coins in the AI industry:

#FET
#AGIX
#PRIMAL
#CAI

P.S. non-financial advice 🪄

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