Maybe the algorithms in charge simply go after the highest value they can liquidate in the shortest period of time and everything else is just noise. - xh3b4sd

The Worldcoin Foundation announced to launch its own Ethereum L2 rollup. Before we dive into more details on the news, here are some background information about the Worldcoin ecosystem. Sam Altman is the co-founder and chairman of the Worldcoin Foundation. Sam Altman is the same guy who co-founded OpenAI. In my eyes the relationship between those two facts have monumental implications for our future. And lucky for us, we can bet on it. In short, the guy who already changed our world forever using machine learning is also the guy who understands the risks of that very technology the most. And that very same guy, Sam Altman, is working on the remedy at the same time that he is working on the poison, figuratively speaking. As I hypothesized in earlier Powerlaw memos, the human race is going to require blockchain networks in a machine learning enabled world. And that requirement implies a lot of demand for a technology that you can bet money on. The pioneers of today's machine learning technologies are going to have unfathomable ramifications for how humans are going to live their lives in the decades to come. And those ramifications call for a counter balance for us to remain sovereign individuals. I think that is the context that Sam Altman understands very well, which is then why he is working on all of the products released by the Worldcoin Foundation. One of those products is World ID. A biometric iris scan is used to create a zero-knowledge proof of the unique data profile that every human eye entails. This uniqueness is used to create a unique private key that humans can use to proof that they are in fact humans. And that is something that humans really want to do in a machine learning enabled world. Whatever can be moved onchain will be moved onchain eventually. That means that the world economy will inevitably run on blockchain networks. And in such an economy it will be of utmost importance to tell who is human and who is not. Let us now come back full circle to the newly announced Ethereum L2 rollup. The Worldcoin Foundation will launch World Chain on top of Ethereum in order to fascilitate all economic activity related to products like World ID. So far Worldcoin related user transactions have been taking place on OP Mainnet, another Ethereum L2 rollup. Those Worldcoin related transactions make up about half of all economic activity on OP Mainnet. What started small 270 days ago is now growing out of its shoes. All of this Worldcoin related activity is expected to grow orders of magnitude in the years to come and therefore requires a more scalable execution environment, while maintaining strong security guarantees. That is what lead the Worldcoin Foundation to launch their own dedicated L2 rollup as part of the OP Superchain. What we know today is that ETH as well as WLD will be used to pay for transaction fees within World Chain. Seeing ETH being used as native token on World Chain is then just a beautiful sight to behold, because Worldcoin in all of its ramifications is yet another leg that this stool is standing on.

More institutional news came from Ernst & Young this week. EY has launched their OpsChain Contract Management, short OCM, on Ethereum using zero-knowledge proofs. Ernst & Young is one of the Big Four accounting firms, having about 50 billion USD in anual revenue, generated by roughly 400,000 employees. One major challenge that the Big Four have to overcome regularly are complex multi-party business agreements. Blockchain networks in this context offer the benefits of increased transparency and trust, because the environment in which those business agreements are recorded is public and trustless, which means that everyone can see that nobody is cheating. The fact that Ernst & Young is using blockchain networks in order to provide professional services to their clients is yet another leg that this stool is standing on. Multi-national corporations like EY and BlackRock legitimize our industry to the extend that there is little to no career risk anymore when shifting your professional focus to blockchain networks in order to become a more competitive business. Those kinds of positive developments pave the way for more economic activity onchain to follow in the future. And the very fact that Ethereum was once again chosen here is a testament to our future vision of a cryptographic world economy.

The macro circus took over again the past couple of days. Many people seem to fear that inflation data trends towards the wrong direction, again. Now, 10 basis points do not make for a trend. The theater about hot inflation is short sighted and overly exaggerated in my mind. The US FED may end up hiking or cutting interest rates from here, but the fact of the matter is that we are already above 5%. Our notional level of around 5% interest rates at the moment is not so relevant for us right now, given our own individual position. What is relevant is the rate of change that may or may not be about to take place. Two things are most unlikely from here on out based on what we know today. First, rates are not going to zero. And second, rates are not going to 10% any time soon either. We may end up hovering higher for longer after all. We may maintain the currently elevated environment for years to come. But all of this is more noise than anything else if we are in fact well positioned for the secular trend that is the adoption of blockchain networks as it is so often elaborated in our weekly Powerlaw memos. What I think truly matters at the moment is the global liquidity cycle. That may stagnate at current levels temporarily and we may see that in the charts if we get a seasonal summer hole while everyone is out enjoying vacations. In any event, none of those factors take away from a 15k ETH target by 2030. And to me personally that is all that really matters.

As a quick final, here are some notable data points. L1 mainnet fees have become pretty affordable again on Ethereum. We are sitting around 10 gwei for most of the days. That is an indicator for the rollup centric roadmap to play out well, because economic activity on L2 rollups is up into the right. The Base L2 has now captured almost 15% market share by TVL with 5.5 billion USD deposited. That makes Base the solid number 3 rollup and I think we can expect Base to capture even more in the future. A speculative mention I will make here is that the transaction fee revenue generated by Base is something almost no Wallstreet analyst understands when estimating the fair value for the Coinbase stock. Buying COIN here should be a no-brainer for anyone who is looking for an index bet on our industry in traditional markets. And lastly, it's Bitcoin halving y'all. From here on out the Bitcoin mining rewards have been reduced from 6.25 to 3.125 BTC per block. Happy belated Bitcoin halving to anyone who celebrated!