Good morning, frens! ☕️ 

The holidays are creeping up, and even the crypto world feels a bit like Christmas morning - some surprises under the tree, others... well, still waiting to be unwrapped.

It’s that time of year where the market buzzes with hope, and everyone’s eyes are on what’s next.

Let’s keep those good vibes rolling! 🎁

Today we’re discussing:

• 💣️ L2s EXPLODE: underdogs turn into industry powerhouses!

• 🦑 Kraken’s Ink speeds into action

• ⚔️ Ambire Legends may just have double XP over the holidays

• 🙊 CyberKongz vs. the SEC: NFTs and gaming tokens under fire

• 🤯 What are degens up to - fart memes BLOW UP the market

In the meantime, it seems that the Grinch made a quick stop by our W3oF portfolio - down a smidge this week 🙈 

But hey, maybe he’s just holding it hostage for a Christmas pump 🎅 👀 

Don’t forget to join us in the #Web3-On-Fire chat on Ambire Discord to share your thoughts, laughs, and maybe some holiday trading strategies.

Let’s start:

L2s EXPLODE: underdogs turn into industry powerhouses!

Layer 2s are the scrappy go-getters of the blockchain universe. They take the heavy lifting off mainnets like Ethereum, cutting costs, speeding up transactions, and making it easier for everyday users to jump in without paying an arm and a leg in gas fees ⛽️ 

Over the past few years, they’ve gone from being “nice to haves” to absolutely essential in scaling crypto. From Polygon’s early dominance to Arbitrum and Optimism taking the DeFi crown, L2s have been the battleground for innovation and competition 👇️ 

Let’s dig into the numbers, trends, and what’s next for the networks driving crypto adoption.

Flipping the script

Flipside Crypto’s report revealed staggering stats for user growth across L2s. In October alone, nearly 19.4 million new users joined, with Coinbase-backed Base leading the pack at 13.7 million.

🃏 If L2s were a high-stakes poker table, Base just slapped down a royal flush. Backed by Coinbase, the new kid on the block decided to run circles around the veterans. And run it did.

• By October, Base wasn’t just making noise; it was smashing records. Nearly 13.7 million new users flooded in, dwarfing long-time contenders like Polygon and Arbitrum.

• 15.1 million wallets on Base hit over 100 transactions (became Superusers). That’s 38% more than Ethereum itself 🤯 

Base tapped into two of the most chaotic, yet wildly popular, corners of crypto: meme coins and onchain AI 🤖 

Degens couldn’t resist the lure, and Base made sure they felt at home. Initiatives like Based Agents turned some complicated tasks into a gamified experience, keeping users hooked and hungry for more.

Polygon, another heavy-hitter, saw 1.5 million new superusers in 2024, emphasizing its focus on DeFi outside of Ethereum.

• Even Ethereum itself retained its grip on the DeFi crowd, boasting over 10 million DeFi related superusers, which is more than Arbitrum and Optimism put together.

• This solidifies Ethereum’s status as the backbone of the decentralized economy, even while L2s themselves thrive atop it 👑 

In the meantime, Uniswap solidified its dominance, capturing 91.3% of DEX activity on Base and increasing its share on Ethereum by 27.72% compared to 2023.

This underscores a broader trend of DeFi giants cementing their position in the market as new players struggle to carve out space.

While Base and Polygon dominated headlines, other networks experienced mixed fortunes.

Blast, a gamified chain, made waves mid-year with a record-breaking 134,000 users in June, but saw a sharp decline in Q4 as points farmers exited 🤔 

The chain’s long-term potential now depends on whether it can evolve beyond initial hype.

Despite the rapid growth, 2024 also highlighted the growing pains of Layer 2 networks. Analysts stressed that while user acquisition was off the charts, the real test lies in engagement quality 👇️ 

• A narrow range of use cases like meme coins and speculative trading dominated activity 🐸 

• This might put networks at risk of losing relevance if they can’t evolve into platforms supporting broader utility, like DeFi, NFT marketplaces, and enterprise applications 🤷‍♂️ 

• Base, for instance, may be riding high now, but its reliance on Coinbase’s brand and hype-driven markets raises questions about sustainability. Similarly, Blast’s rise and fall show how quickly a network’s fortunes can change when the focus isn’t on long-term utility.

As 2024 comes to a close, it becomes clear: Layer 2 networks did well, but the race is far from over.

The winners will be those who not only attract users but also keep them engaged with meaningful applications. Whether the meta would be expanding DeFi, embracing gaming, or diving into AI, the key lies in evolving beyond short-term trends.

Kraken’s Ink speeds into action

… and on the topic of L2s, new ones backed by major players keep entering the scene.

Kraken’s Layer-2 blockchain, Ink, has just gone live on mainnet earlier than expected, signaling yet another addition to the growing family 👇️ 

• Originally planned for a 2025 release, Ink’s launch was expedited after millions of testnet transactions and connected wallets indicated strong interest from developers and users alike 💰️ 

• Built on Optimism’s Superchain, the project aims to enhance interoperability and decentralization in Layer-2 scaling, a space that’s become increasingly crowded with contenders.

Kraken’s decision to push Ink ahead of schedule might reflect the competitive environment L2 projects are operating in 🤔 

The platform has faced its own hurdles this year, including regulatory setbacks like an $8 million fine in Australia and the closure of an NFT marketplace. But those haven’t deterred Kraken from moving forward with this ambitious venture 🦑 

The collaboration with Optimism ties Ink into a larger ecosystem, leveraging the Superchain’s infrastructure to scale Ethereum while expanding its own reach. Early numbers suggest Ink has momentum - over 100,000 users during its testnet phase, with the mainnet launch further ramping up activity 🏃 

For Optimism, this partnership could help balance out the challenges it faced earlier in the year, from underwhelming OP token performance to scaling pressures. While it’s too early to make bold claims about Ink’s impact, it’s clear the L2 is adding to the conversation around scaling solutions.

As the L2 race continues, Kraken’s Ink is entering a crowded but critical space. Its success - or lack thereof - will depend on how well it manages to navigate the complex dynamics of adoption, decentralization, and utility. And as always, degens are also counting on good memes.

Ambire Legends may just have double XP over the holidays

As this newsletter lands, a governance vote is ending - and things are looking festive 🎁

It seems like the results are going to be in favour of doubling XP for Ambire Legends players over the holidays - make sure you join in ASAP so you don’t lose out.

If you (somehow) don’t have the Ambire browser extension yet - lose no time and grab a code on Ambire’s Discord (hint - the best channel to get one is refcodes)!

CyberKongz vs. the SEC: NFTs and gaming tokens under fire

The NFT and gaming worlds just got hit with some serious heat.

• CyberKongz, one of the OG NFT projects, dropped a bomb that’s shaking up Web3: the SEC served them a Wells notice (a Wells notice is basically the SEC saying, “we might sue you” 🤷‍♂️ )

• CyberKongz didn’t take this lying down, accusing the agency of missing the point of blockchain tech entirely (duh).

The SEC’s beef is CyberKongz’s gaming token, $BANANA, an ERC-20, is allegedly stepping into securities territory without permission 🤪 

• The team fired back, calling the move clueless and saying it puts the whole Web3 gaming space at risk. They’ve been sitting on this drama for two years, and now they’re ready to rumble 🥊 

• The NFT and gaming community isn’t staying quiet. Industry heavyweights like Axie Infinity’s founders are already backing CyberKongz, seeing this as a frontline battle for decentralized innovation.

If the SEC wins this round, it could send shockwaves through the entire space, putting a target on projects that have been pushing boundaries in gaming and NFTs.

While CyberKongz is gearing up for a fight, Crypto.com is playing the long game 🕵️ 

CEO Kris Marszalek recently met with Trump at Mar-a-Lago, chatting about crypto policies and even the idea of a national Bitcoin reserve.

A few hours later, Crypto.com made a surprise announcement: they’re dropping their lawsuit against the SEC.

This wasn’t some random change of heart. With Trump signaling a more crypto-friendly vibe and stacking his potential administration with pro-crypto names like David Sacks and Paul Atkins, Marszalek saw an opportunity to align with the incoming power players.

Strategy 🧠 

What are degens up to - fart memes BLOW UP the market

Degens in the crypto world never fail to keep things... interesting.

While the broader market was busy grappling with the market ups and downs, a peculiar trend stole the spotlight: meme coins breaking every unspoken rule about seriousness in finance. And leading this carnival …. are coins named Fartcoin and Unicorn Fart Dust 🫢

Fartcoin: The OG of the flatulence meta

In a sea of despair caused by an altcoin bloodbath, Fartcoin emerged as an unlikely top dog. This Solana based memecoin saw an insane pump, briefly tapping a $1 billion market cap before retreating to $838.4 million 🤯 

Traders, in an ultimate "YOLO" move, flocked to this coin, some calling it the "funniest possible outcome" in a grim market.

• Fartcoin’s rally wasn’t just fueled by degens on a meme spree. The coin’s rise coincided with hedge fund jokes about Ivy League grads trying to underperform “14-year-olds trading Fartcoin in their moms’ basements”.

• Not long after Fartcoin, YouTuber Ronald Bransteğer decided to one-up the absurdity.

• Obviously inspired by the ridiculous success of Fartcoin, he launched Unicorn Fart Dust, a token meant to critique the speculative nature of crypto.

Within 48 hours of its debut, UFD skyrocketed to a $240 million market cap.

As if this circus wasn’t entertaining enough, Stephen Colbert added his own spin. The late-night TV host dropped a bombshell: he invested in Fartcoin.

Dubbed "silent but wealthy," Colbert’s tongue in cheek endorsement sent the space ablaze. Whether he was trolling or serious didn’t really matter - Fartcoin’s lore only got richer.

While memes like are hilarious in their premise, these pumps underscore a bigger trend: the crypto market thrives on absurdity. In a landscape where utility often takes a backseat to vibes, degens continue to redefine what’s possible and acceptable 🙃 

For now, fart memes are blowing up more than just charts; they’re redefining how we laugh, speculate, and question everything about modern finance.

And, eh, as always - degens gonna degen.

Other worthy reads

TruthFI summarized, by Arthur Hayes:

In depth dive on Crypto x AI meta by Archetype:

2025 marketing and growth sector predictions, by Alex:

MEMES

That's all for now, frens.

We'll meet in a week! And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us, and we look forward to seeing you back next week. Cheers!

Yours, The 🔥 Team

Brought to you by Ambire: The Only Web3 Wallet That You’ll Need!