Where crypto angel investors should deploy capital after Ethereum ETF approval




The
following
is
a
guest
post
from
Tim
Haldorsson,
CEO
of
Lunar
Strategy.


In
nine
short
years,

Ethereum
has
gone
from
pioneering
on-chain
smart
contracts
and
programmable
crypto
to
becoming
the
backbone
of
decentralized
finance
and
blockchain
infrastructure.
The
recent
SEC
approval
of
ETH
ETFs
is
just
a
single
step
in
this
journey,
albeit
a
significant
milestone
that
has
solidified
Ethereum’s
status
as
a
mature
asset
class
worthy
of
serious
investment
consideration.


This
op-ed
will
highlight
the
most
promising
sectors
within
the
Ethereum
ecosystem
that
I
believe
angel
investors
should
watch
closely
to
take
advantage
of
this
economic
momentum.

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Layer
2
Decentralized
Finance
(DeFi)


Ethereum
paved
the
way
for
the
birth
of
decentralized
on-chain
markets,
planting
the
seeds
that
have
blossomed
into



a
global
DeFi
sector
with
a
market
cap
of
$104.55
billion
.


DeFi
is
a
complex
rabbit
hole
filled
with
unique
financial
mechanisms
that
are
unparalleled
in
traditional
finance.
However,
they
rely
on
the
security,
speed,
and
decentralization
offered
by
Ethereum’s
smart
contracts.
Layer
2
networks
like
Base,

Arbitrum,
and
zkSync
have
emerged
to
address
Ethereum’s
scalability
issues,
reducing
usage
costs
and
increasing
transaction
speeds
without
sacrificing
privacy
or
security.
These
improvements
make
Ethereum’s
technology
more
accessible
and
perfect
for
DeFi
activities. 


In
the
DeFi
space,
projects
like
lending
and
borrowing
platforms,
futures
and
perpetuals
trading
platforms,
token
seeding
and
launching
platforms,
and
both
centralized
and
decentralized
exchanges
have
proven
immensely
successful.
Even
in
the
days
when
ETH
only
commanded
the
attention
of
a
small
niche
of
market
participants,
these
technologies
were
spun
into
a
myriad
of
business
models
that
proved
a
real
demand
for
DeFi
solutions
on
a
grand
scale.
Some
of
the
top
DeFi
protocols
have
even
grown
to
multi-billion
dollar
valuations,
underscoring
the
strength
of
this
sector.


As
Ethereum
transitions
into
a
recognized
commodity,
the
potential
for
further
growth
in
DeFi
becomes
even
more
certain,
making
it
a
lucrative
area
for
angel
investors
to
deploy
capital.

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Artificial
Intelligence

Artificial
intelligence
is
one
of
the
most
important
technologies
of
our
time,
comparable
to
the
impact
of
blockchain
technology.
The
world
needs
AI
technologies
that
can
be
trusted
and
that
are
free
from
centralized
control.


Blockchain
enables
secure,
private,
and
decentralized
frameworks
for
AI
services,
crucial
for
preventing
monopolies
on
scarce
compute
resources
and
for
providing
broader
access
to
decentralized
machine
learning
networks.
By
leveraging
Ethereum’s
blockchain
for
AI
projects,
developers
are
already
building
AI
services
that
remain
secure
and
decentralized.


This
intersection
of
AI
and
blockchain
is
an
attractive
playing
field
for
investment,
as
the
demand
for
decentralized
and
secure
AI
solutions
continues
to
rise.
AI
projects
built
on
Ethereum
have
already
achieved
multi-billion
dollar
market
caps,
showing
discerning
observers
that
it
is
a
powder
keg
of
explosive
growth.
The
recent
approval
of
ETH
ETFs
might
be
the
spark
that
ignites
the
next
leg
of
expansion
this
sector
is
primed
for.


Decentralized
Physical
Infrastructure
(DePIN)

DePIN
is
one
of
the
exciting
blockchain-dependent
sectors
that
have
emerged
thanks
to
the
miracle
of
smart
contracts.
In
a
nutshell,
it
merges
physical
infrastructure
with
digital
networks
of
decentralized
participants
and
facilitates
the
global
exchange
of
limited
but
in-demand
resources
like
sensors,
data
storage,
or
wireless
connectivity
in
return
for
crypto
tokens.

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DePINs
offer
decentralized
governance,
peer-to-peer
infrastructure
sharing,
tokenization,
and
enhanced
security
and
privacy
for
traditional
and
digital
industries.


As
demand
for
DePINs
grows,
so
will
the
market
for
these
resources,
driving
token
appreciation
and
market
expansion.
Ethereum
powers
the
smart
contracts
that
run
these
DePINs,
making
it
a
crucial
component
of
this
ecosystem.
With
the
recent
approval
of
ETH
ETFs,
more
angel
investors
are
likely
to
turn
their
attention
to
DePINs,
recognizing
their
potential
for
high
returns
and
significant
real
world
impact.


ETH
Restaking

Staking
is
a
fundamental
aspect
of
securing
decentralized
networks
like
Ethereum
through
economic
game
theory.
Validators,
who
run
the
nodes
powering
the
blockchain,
are
required
to
stake
ETH.
If
they
follow
the
rules,
they
earn
rewards;
if
they
attempt
to
cheat,
they
lose
their
staked
ETH.

Currently,
over
$100
billion
worth
of
ETH
is
staked
—that’s
how
important
this
mechanism
is
to
operating
blockchain
networks.


Restaking
takes
this
concept
further
by
applying
the
same
game
theory
to
secure
any
protocol
on
the
blockchain.
This
enables
smaller
participants
to
maintain
high
levels
of
security
through
proof-of-stake
mechanisms
that
would
otherwise
be
unattainable.
Restaking
helps
to
create
a
more
resilient
network
for
multiple
protocols,
making
it
cost-prohibitive
to
attack
any
single
participant
within
the
larger
proof-of-stake
pool.


Liquid
restaking
services
further
simplify
the
process
for
those
seeking
to
stake
tokens
without
managing
complex
validators.
These
services
issue
Liquid
Restaking
Tokens,
which
accrue
yield
and
interest
from
validator
rewards
and
can
be
traded
or
restaked
to
generate
additional
rewards.
This
sector’s
growth
underscores
its
importance
as
a
security
mainstay
for
blockchains,
making
it
a
compelling
area
for
angel
investors.


Conclusion


The
approval
of
ETH
ETFs
has
stamped
Ethereum
as
a
leading
investment
vehicle.
The
Ethereum
ecosystem
offers
many
exciting
opportunities
for
angel
investors,
from
Layer
2
DeFi
and
AI
integration,
to
DePINs
and
restaking.


It’s
important
to
study
these
sectors
and
understand
both
their
leading
narratives
and
growth
catalysts.
This
way,
investors
can
deploy
smart
capital
while
contributing
to
the
growth
of
Ethereum.

Go to Source
Author: Tim Haldorsson


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