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GM. This is Milk Road – we sift through crypto news to find you the hidden gems, like your aunt at the Macy’s bargain bin!

Here’s what we got for you today:

NO, ETHEREUM ISN’T DEAD. HERE’S WHY 👇

First, let’s rip the bandaid off:

Ethereum revenue is plummeting, fees were down $679m in Q2 (57%), and sentiment is falling alongside price.

…but is this really as bad as it looks?

Short answer: no.

Long answer…

Back on March 13th, Ethereum Improvement Proposal (EIP) 4844 was implemented, increasing the scalability of L2s, while lowering fees for users.

Which was kinda like a mom n’ pop corner store transforming into a Walmart overnight…

(All of a sudden, mom n’ pop can handle way more customers, and buy in wholesale quantities – large enough to massively lower their prices).

Capacity expansion and lowered cost is obviously a positive thing for the Ethereum ecosystem, long term - but it comes with some teething issues…

The good: By increasing the supply of Ethereum’s main product (blockspace – aka: transaction capacity), L2’s can now offer near-zero transaction fees to their users, and increase their margins…by like, A LOT. 💰

(It’s pretty much a big flashing billboard, saying “COME BUILD ON ETHEREUM!”)

The bad: The rent paid by L2s to settle on Ethereum has dropped drastically – and in order for this fee revenue to recover, the Ethereum ecosystem needs to significantly grow its user base.

…which is exactly what’s happening.

L2 transactions were up 63% in Q2, while active users pumped 81% 👇

🥛 Milk Road Take: Like the internet before it, Ethereum is having its broadband moment, the expanded capacity is laid (aka: cheap blockspace supply) – now the demand just needs to catch up with supply, and drive Ethereum’s revenue back up.

It took years for the internet’s broadband capabilities to be fully leveraged – Youtube couldn't have existed when the internet was on dial up. 

But once capacity opened up, the possibilities were endless. 🚀

Ethereum is having a similar moment - sure, its revenue is down, but so long as the Ethereum ecosystem as a whole continues to grow, $ETH is far from dead - hell, the ecosystem is alive, kicking, and brimming with opportunities!

…you just need to know where to look. 👀

So, in today’s episode of The Milk Road Show, our lead researcher for Milk Road PRO, Kyle Reidhead, takes a deep dive into the numbers—why they are the way they are and what it all means for your crypto bags.

Tune in! 🎧️ 

YouTube | Spotify | Apple Podcasts

COST OF LIVING EASING → PRICES SETTING UP TO RUN 🏃 

Over the past two days we’ve received a fresh new delivery of PPI & CPI data (and both are trending down 💪).

Why this matters: If the data is trending down, there’s a higher likelihood that the Fed will start cutting rates. ✂️ 

(Making loan/credit repayments cheaper → giving us all more milk money to spend → ideally boosting the economy and asset prices, over time).

But if this data trends up, the opposite will happen (rates/cost of living up → vibes/prices down).

Good news: Both PPI & CPI inflation rates aren’t just trending down, they’re falling faster than expected. 

Translation: The likelihood of rate cuts just went up in the near-term! 🔥 

(And Polymarket agrees👇)

Now, here’s what to watch out for: If inflation falls too fast / too consistently, that could be an early sign that we’re heading into a recession.

Think of it like landing a plane: you want to descend slowly over time, instead of nose diving into the tarmac.

(Btw, we laid out some more thoughts on this in yesterday’s podcast)

But for now – while market turbulence is still present, inflation’s descent is remaining steady. 🛩️ 

BITE-SIZED COOKIES FOR THE ROAD 🍪

Goldman Sachs has invested $418M in U.S. spot Bitcoin ETFs, spreading its investment across seven different funds. This includes major positions in BlackRock's iShares Bitcoin Trust and Fidelity's FBTC, highlighting the bank's strategic entry into the crypto market​.

Bitcoin miners have resumed expanding their operations, pushing the network hashrate to a new all-time high despite recent price drops. This increase in activity follows a significant miner capitulation event, suggesting that the worst of the selling pressure may be over​.

Renzo is expanding into Solana's liquid restaking space by partnering with the Jito Foundation. They will launch $ezSOL, a new liquid restaking token, next month, utilizing Jito's validator network. This move positions Renzo as a key player in Solana's DeFi ecosystem.

MetaMask has begun rolling out its blockchain-based debit card, developed in collaboration with Mastercard and Baanx. Initially available to a limited number of users in the EU and UK, the card allows direct purchases with cryptocurrencies like USDC, USDT, and wETH held in MetaMask's self-custodial wallet.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.