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$TRUMP May Have Bloodied Markets, but BTC Hits ATH and There's Room to Stretch

PLUS: Arbitrum’s BoLD Push for Stage 2 Decentralization

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Atomist, 0x_Vlad, CJ CJ & MarketsAlpha
January 23, 2025 • Est. Reading Time: 16 minutes

This week’s newsletter is brought to you by Umami Finance — celebrating one year of delicious yields on GM vaults.

GM. Welcome to Castle Chronicle—the weekly newsletter delivering market alpha, spicy insights, and the occasional curveball to keep you sharp. We sift through the crypto chaos so you don’t have to.

The big news this week was $TRUMP and $MELANIA shaking up investors and traders alike, with each coin vampiring the others’ liquidity and that of the entire market, with each seeing massive gains if you were online at the right time.

Here’s what we have for you today:

  • 📈 Market Watch – Trump Making Moves in Memes and DeFi, on Solana AND Ethereum

  • 🔑 Price Action – BTC Breaks ATH and Preps the Market for Bullish Continuation

  • 💙 Arbitrum Corner – BoLD and the Steps to a Stage 2 Rollup

  • 🔍 Key News – We Read The News So You Don’t Have To

  • 📖 Recommended Reads — We Uncover the Gems For You

Donald Trump Win GIF by Pudgy Penguins

🔍️ MARKET WATCH

LET’S TALK MARKET DRAMA

First up, Trump’s crypto token ($TRUMP) made a yuge entrance this week, skyrocketing to a $10 billion market cap. Melania joined the party too with $MELANIA, pushing PolitiFi tokens up an eye-watering 1,372%. This duo didn’t just grab headlines—they stole liquidity from the market, sending Bitcoin to a new ATH after dumping the crypto ecosystem to fresh lows.

CoinGecko Sector Performance

Meanwhile, Real World Assets (RWAs) followed with a solid 114% gain, reminding us that practical blockchain applications are still stealing the show. And let’s not forget AI tokens—after being oversold, they staged a strong rebound, up 4.9% in just 24 hours.

Delphi Sector Map

Solana & AI Weekly Performance of Tokens

STABLECOINS ARE THRIVING TOO

The total market cap of stablecoins hit an all-time high of $213 billion. Solana stole the spotlight here, with its stablecoin market cap soaring 69% last week to $10.18 billion. USDC continues to dominate, claiming over 80% of Solana’s stablecoin pie.

VIRTUALS REPURCHASE PLAN

The repurchase plan is in full swing, with GAME, CONVO, and AIXBT topping the charts. Since October 2024, the protocol has repurchased and destroyed over 12.99 million VIRTUALs using its 30-day TWAP mechanism.

ONCHAIN MOVEMENTS

World Liberty Financial went on a shopping spree, snapping up over $100M in crypto, including $46.8M in ETH and $46.7M in WBTC.

A big whale made some serious $PENGU moves this week. First, they deposited 400.1 million $PENGU (worth $9.5M) and withdrew a total of 581.96 million $PENGU from Binance—valued at a whopping $15.87M. But it wasn’t all hodling; they also sold 71.96 million $PENGU, cashing in $1.93M.

Busy week, huh?

Courtesy of @MarketsAlpha - Telegram channel for sharing crypto market research and Intel Alpha

📈 PRICE ACTION

Gm frens!

Another week, the same old sideways. Or was it?

This week we reached a new ATH, which is a perfect sign for bullish continuation. The trend is still going strong as price rises above the growing 10/20 EMA.

Here’s where we’re at:

  • Healthy uptrend

  • Ongoing momentum cycle

  • Expecting another re-accumulation

This creates a beautiful environment for the whole crypto sector and it makes sense to look for relatively stronger performers.

  • As BTC gains % → look for relatively stronger coins that gain even more %

  • As BTC loses % → look for relatively stronger coins that lose less %

The goal is to join the momentum of the most demanded assets and ride it higher as the whole sector is enjoying a massive influx of money. Happy hunting!

Trade responsibly and I’ll see y’all next time!

Not following what I’m talking about? Check out my quick cheatsheet to briefly explain how I approach a chart.

Courtesy of 0x_Vlad - trend-based trader and MentFX student

💙 THE END OF MULTISIGS FRONTING AS ROLLUPS

In September 2024, Vitalik Buterin declared, "The era of rollups being glorified multisigs is coming to an end."

What does this mean for Ethereum’s Layer 2 ecosystem? A lot, actually. Rollups can’t keep relying on centralized safety nets. They need to step up, shed their "training wheels," and embrace true decentralization.

Enter Arbitrum.

While some rollups are still stuck in Stage 0, Arbitrum is miles ahead, and leading the charge toward Stage 2 with its latest BoLD proposal. If successful, Arbitrum will set a new standard for decentralization across the rollup ecosystem.

WHAT DOES ROLLUP DECENTRALIZATION EVEN MEAN?

Let’s break it down.

Decentralizing rollups happens in three stages:

  1. Stage 0: Centralized Rollups: Think of this as the "trust us, we got this" stage. Most governance and operations are handled by a central entity, with users left hoping nothing goes wrong.

  2. Stage 1: Semi-Decentralized Rollups: At this stage, decision-making starts moving into the hands of the community via mechanisms like DAOs. Some centralized fallback mechanisms are still in place, but key processes—like upgrades and fraud proofs—are more transparent.

  3. Stage 2: Fully Decentralized Rollups: This is the real deal—governance and operations are entirely permissionless, validation is open to anyone, and the system can function without centralized control.

Right now, Arbitrum is solidly in Stage 1 and working hard to hit Stage 2. But the stakes are high—progress here could redefine what trust and security mean for Ethereum Layer 2 solutions.

Meanwhile, some big names like Base, Starknet, and ZKsync Era are still sitting in Stage 0, far behind the curve.

THE BOLD PROPOSAL

Arbitrum's Bounded Liquidity Delay (BoLD) protocol is a major step forward in decentralization.

Here’s what it brings:

  • Permissionless Validation: BoLD enables anyone with the necessary resources to help secure the network. This removes the need for a permissioned validator set. No more gatekeeping—this is decentralization in action.

  • Time-Bound Dispute Resolution: BoLD guarantees that disputes are resolved within 14.8 days. This eliminates long delays and keeps the system running smoothly.

  • Enhanced Security: BoLD enhances security by mitigating delay attacks and strengthening fraud-proof mechanisms, making the network more robust. It also ensures that a single honest party can always outmatch malicious actors in disputes, further boosting trust in the system.

WHAT’S NEXT?

Even with BoLD, there is still work to be done for Arbitrum to reach Stage 2.

Key challenges include:

  • Restricting Security Council Powers: The Security Council’s authority will need to be further restricted to only intervening in the case of provable on-chain bugs.

  • Increasing the Exit Window: The L2 must provide users with at least 30 days to exit in case of unwanted upgrades, including those initiated by the DAO. Exceptions are made for critical bug fixes, which will allow for immediate intervention.

  • Strengthening Community Engagement: Educating stakeholders on governance processes and encouraging active participation will be critical to maintaining decentralization.

RAISING THE BAR

Arbitrum is leading, but let’s be real—too many rollups are still dragging their feet.

Projects stuck in Stage 0 need to face the music. Developers, users, and investors must demand clear timelines and actionable plans for achieving at least Stage 1 status.

And let’s not forget Vitalik’s promise to stop mentioning Stage 0 rollups starting this year (2025). The community needs to hold him to it. By publicly supporting only those rollups making real progress, Vitalik can help raise the bar for the entire ecosystem.

WHY THIS MATTERS

Arbitrum's focus on decentralization is a model for others to follow.

It’s not just about Arbitrum—it’s about setting a precedent. A fully decentralized rollup means stronger trust, better security, and more power in the hands of the community.

Take Action: Engage with rollup governance, demand transparency, and support projects that prioritize decentralization. Together, we can ensure Ethereum’s Layer 2 ecosystem grows into the trustless, decentralized future it was meant to be.

Courtesy of Atomist - Founder of Castle

🔑 KEY NEWS

MAJOR HEADLINES

PROJECT UPDATES

INTERESTING PROJECTS

Courtesy of CJ - check out his telegram channel for daily news, project updates, and new releases

ICYMI

That’s a wrap for this week—stay sharp, stay curious, and don’t let the memecoins get you FOMO’ing. Catch you next time.

Wave Penguin GIF by Pudgy Penguins

In our newsletter, we may discuss projects or tokens in which we hold positions. While we aim to provide informative content, our views are not financial advice. Please conduct your research and consult professionals before making investment decisions. Crypto markets are volatile, and past performance doesn't guarantee future results. Invest responsibly, and be aware of the risks. Your capital is at risk, and we do not accept liability for any losses.

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