Ethereum Name Service Update
ENS domains are now the top traded NFT collection, according to the leading NFT marketplace OpenSea.
ENS (Ethereum Name Service) trading volume is rising at a 43% week-over-week clip despite other NFT projects falling in value.
According to OpenSea, there are now over 500,000 owners of unique ENS NFTs with trading volume over $86 million.
ENS has a near monopoly on the sale of Ethereum domain names at 99% of market share.
More than 9,000 ENS domain names were traded in the past week alone. This is exciting because Ethereum Name Service domains represent a significant real world use case for web 3.0, unlike many other projects!
These Ethereum domains are linked to cryptocurrency wallets, which helps businesses to be paid in cryptocurrency. It is how our modern web search works – instead of typing in an IP address, we can search cabotwealth.com!
Refresher:
NFTs are unique digital assets that show proof of ownership through their state on a verified blockchain.
Ethereum Update
This represents a very attractive risk/reward entry point for Ethereum. Ethereum is significantly upgrading the security of their blockchain while also reducing fees for network usage. This should further improve scalability and increase the velocity of exchange.
Most decentralized financial systems are being built on the Ethereum blockchain – this represents a real-world use case for cryptocurrency. Providing users with access to credit using software is an important global development. These DeFi (decentralized finance) protocols are using ETH as the infrastructure.
Important disclosure:
The Ethereum foundation has stated that users do NOT need to do anything with their ETH cryptocurrency holdings ahead of the network upgrade. This means that users should be on the lookout for any false scams that suggest otherwise. You can continue to purchase and trade ETH on both centralized exchanges such as Coinbase, Binance or FTX, as well as decentralized exchanges such as Uniswap.
NVDA
GPU (graphics processing unit) prices have fallen partially due to Ethereum moving from proof of work to proof of stake but also because of a huge pull forward in demand during Covid as people turned to gaming as an outlet. Nvidia (NVDA) still has locked up 80% of the GPU market, outpacing rival Advanced Micro Devices (AMD). Despite this challenging macro-economic environment, Nvidia’s datacenter business is growing well over 60% y/y. Datacenters and autonomous robotic systems (including self-driving vehicles) represent a larger total addressable market opportunity for Nvidia. With upcoming stock buybacks underway, we view this as a favorable time to purchase shares of NVDA.
OKTA
Okta, Inc. (OKTA) stock dropped over conservative guidance on billings. However, the stock has beaten revenue estimates by mid-to-high single digits for three straight years. The company voiced difficulties integrating teams following the acquisition of Auth0. The stock now trades at a historically low multiple of less than 4x revenue and remains the market leader for identity cloud solutions. Median high growth enterprise SaaS multiples have traded closer to 12-15x revenue historically.
Okta’s solutions are particularly important in today’s distributed cloud-based work environment, as more people continue to opt to work from home relative to pre-pandemic norms. Okta provides SSO and Multi-factor identification services to businesses that require this level of data security. If you have received a text code to log in to something you have likely used Okta.
Given its historically low multiple and continued growth, I recommend continuing to Hold OKTA stock.
Brief Blockchain Refresher
During the rise of software development, many programmers began to “open source” their projects. There were several reasons for this. The more people who are able to view your work, the more you can stress test it and build interesting and cool things together. Imagine a musician who only chooses to perform alone in their bedroom. That is many people – but the ones who step outside have a chance to be recognized and rewarded. Open source is a way to give back to the developer community. To learn and build together.
This ethos represents the origins of blockchain technology.
Blockchains operate on many servers around the world. This means many people can participate in running the network. This is interesting because the data is stored not in one centralized location but in thousands of locations at once in the case of Ethereum. This process is called Distributed Computing and it ensures that every “network node” has a copy of the “blockchain.” This information is updated in real time when, for example, a transaction takes place.
Crypto Portfolio
| Ticker | Initial Weight | Price | Price at Rec | Performance | Rating |
| ETH | 18.0% | 1,561.47 | 3,444.22 | -54.66% | BUY A HALF |
| ENS | 7.00% | 13.72 | 10.22 | 34.25% | BUY A HALF |
| MATIC | 7.00% | 0.87 | 0.678 | 28.10% | BUY A HALF |
| APE | — | 4.69 | — | — | WATCH |
| SOL | — | 31.06 | — | — | WATCH |
| HNT | — | 4.50 | — | — | WATCH |
| STEPN | — | 0.67 | — | — | WATCH |
| AVAX | — | 18.83 | — | — | WATCH |
| LINK | — | 6.84 | — | — | WATCH |
Equity Portfolio
| Ticker | Initial Weight | Price | Price at Rec | Performance | Rating |
| Proshares Strategy Bitcoin ETF (BITO) | 2.50% | 12.31 | 25.93 | -52.53% | BUY A QUARTER |
| Arista Networks (ANET) | 2.50% | 117.3 | 105.00 | 11.71% | BUY A QUARTER |
| Nvidia (NVDA) | 2.50% | 136.47 | 188.20 | -27.49% | BUY A QUARTER |
| Okta Inc. (OKTA) | 2.50% | 64.63 | 95 | -31.97% | HOLD A HALF |
| Block Inc. (SQ) | — | 66.33 | — | — | WATCH |
| Concord Acquisition (CND) | — | 10.07 | — | — | WATCH |
| CrowdStrike (CRWD) | — | 172.45 | — | — | WATCH |
| Galaxy Digital (GLXY.TO) | — | 6.63(CAD) | — | — | WATCH |
| Proshares Short Bitcoin ETF (BITI) | — | 38.97 | — | — | WATCH |
| Unity (U) | — | 40.79 | — | — | WATCH |