Lending, spot DEX exchanges, and yield protocols are about to become extremely appealing from an R:R perspective. DegenSpartan bull market is going to return to DeFi Summer names. I'm nearly certain of it, here's why and how to position for it: The Tokenization Supercycle is the most powerful undercurrent in the entire industry. Nothing else compares. It's a multi year secular trend to bring trillions of dollars of assets onchain, which will grow DeFi value by 50x or more. It's going to happen lightning fast, as well. In addition to this force, a brutal bear market where $BTC only went down -50% but the alt complex lost 95% of value has created a seismic shake up in the philosophy of the industry's greatest investors: they are no longer settling for narratives and memetics, they want to see value and economics. Founders are forced to adapt to the new climate to produce the same results as before. (Many got rich without producing a ton of value, who will always exist in the industry, yet are now watching from the sidelines in a way...) This is bullish. Meanhwile, one can guess what these protocols are doing? Building real businesses. Building out better token structures. Thinking long-term and onboarding institutional players. $ENA is one that comes directly to mind here but also $UNI, $AAVE, and to some extent $LINK. These protocols are improving their unit economics at the same that Wall Street is realizing they are 5 years behind onchain finance is about to swallow some part of their flow. (They're in trouble). Meanwhile, protocols with battle-tested smart contracts, efficient business lines, and a real founder presence with institutional allocators will re-rate hard. $PENDLE & $MORPHO come to mind here. The game for founders is a lot harder now, which in a way, makes our life easier as investors. Also, when the TL starts talking shit about Stani and Aave - it’s hard not to get perked up about DeFi OG tokens. Higher.

Everyone at TOKEN2049 is so bullish, I absolutely love it.

FINAL UPDATE: After getting more context from multiple sources, the ongoing situation looks a lot more like last year's Kiln situation where there was a potential infra breach in which the node operator proactively exited the relevant keys out of caution. For users, the liquid staking operations are non-custodial so we have been told that no funds are at risk of being stolen. In the event of the worst case scenario, it appears to be orders of magnitude smaller than the recent KelpDAO exploit. It seems to be contained. We have not heard official comms from Consensys on the status of Metamask infra. We are looking forward to an update from their team. We do not expect any contagion across liquid staked ETH, restaked ETH, or DeFi at large. Several protocols mentioned in my previous posts have taken action proactively, and others may continue to do so. For now, it seems that we are safe, “funds safu”, but we await the post-mortem from the protocols involved for the sake of transparency. Will keep you updated as the situation develops.

Rumor mill saying the Metamask exploit could be far worse than people are expecting, with a small % of the Ethereum supply being ‘held hostage’ onchain from a single liquid staking provider. More to come as we learn more from our sources, but hoping it’s a nothing burger.