Coin Metrics is committed to building the crypto economy on a foundation of truth, providing authentic and accurate data with the highest standards of clarity and precision. With this mission in mind, we are proud to share our December edition of Movers and Shakers, the monthly resource aiming to bring more transparency and credibility to the rapidly evolving crypto space.
As new assets reach a certain degree of accessibility to investors, specifically as they achieve alignment with our Market Selection Framework and the Trusted Volume Framework, Coin Metrics uses its crypto expertise to describe the assets’ context of use. The following assets are expected to reach alignment this month:
EigenLayer (EIGEN) is a blockchain network on Ethereum bootstrapping underlying security mechanisms to support decentralized protocols. EigenLayer allows Ethereum stakers to restake their tokens with Actively Validated Services (AVSs) which provide infrastructure services to networks and applications. Staking ETH to secure multiple services and networks reduces the cost to secure applications and minimizes the cold start problem of applications acquiring capital and incentivizing users to stake a new native asset to attract users. AVSs support modular blockchain development by providing services such as data availability, decentralized sequencing, and cross-chain messaging as an alternative to natively maintaining each function. Users can delegate their stake to Operators who select AVSs to secure. Extending Ethereum’s Proof-of-Stake cryptographic and economic security to applications not directly built on Ethereum, EigenLayer AVSs offer additional yield to restakers, but can also have the economic collateral slashed when a service operates improperly. EIGEN tokens can be staked to secure AVSs and act as a universal intersubjective work token. This means that EIGEN tokens can be forked if an AVS were to act maliciously and met custom slashing conditions, preventing the malicious actor from exiting an EIGEN position and holding tokens that are no longer widely accepted. EIGEN tokens can help settle faults that cannot be mathematically or cryptographically proved on-chain, using participant consensus to agree on observed activities and fault parameters.
Pendle Finance (PENDLE) is an asset management platform that focuses on providing users with various yield-management strategies. Pendle enables users to trade yield-bearing tokens and the underlying yield separately. Pendle wraps yield-bearing tokens into Standardized Yield (SY) tokens and splits deposited assets to allow users to create strategies based on if yield rates are expected to rise or fall. Assets are split into Principal Tokens (PT) or Yield Tokens (YT) to earn fixed or variable yield rates respectively. Principal Tokens are discounted and can be redeemed 1:1 with the underlying yield asset after a maturity date. Pendle’s AMM specifically accounts for yield changes as it narrows PT price range when approaching maturity dates. PENDLE tokens provide holders swap fee rewards and are locked in a vote escrow module to participate in governance proposals.
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