OVERVIEW
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Hey 👋 

Your latest dose of Spiral Strategies is here! Here’s what’s new in the world of crypto today:

• Ethereum gearing up for upgrade

• Layer 2 scaling solutions

• Arbitrum taking over?

NEWS

Ethereum's Upcoming Pectra Upgrade

Ethereum just can’t stop with the bullish news!

There’s talk of a potential Ethereum upgrade in 2025. We’ve done the heavy lifting for you so let's simplify things.

Imagine Ethereum as the Hogwarts of the crypto world, full of magic (or in this case, technology) and constantly learning new spells. Originally, it was going to show off its latest trick, the Pectra upgrade, by the end of 2024.

But you know how it is with magic shows, they like to keep you on the edge of your seats, so now they’re planning it for early 2025.

The Pectra Upgrade

*Cue dramatic trailer music*

Coming soon in early 2025, the Pectra upgrade is set to raise the stake cap for validators from 32 to 2,048 ETH.

That’s a lot of MONEY — to be specific that’s $7,950,336 at the time of writing, and it could be way more once Ethereum ETF inflows come in.

You might be thinking, “WTF is a validator?”

Think of validators as the gatekeepers of the network, they’ll now be able to hold more ETH, making them like supercharged gatekeepers.

This change helps streamline operations, so instead of juggling many small tasks, they can focus on fewer, bigger ones.

Pectra’s has two parts:

1. "Prague" for the Execution Layer (the action)

2. "Electra" for the Consensus Layer (the agreement).

Ethereum's latest upgrade includes EIP-7702, a fresh proposal from Vitalik Buterin himself. This will replace an older system, allowing regular accounts to function more like smart contract wallets during transactions.

Pectra will also introduce PeerDAS, an advanced data sampling system using Ethereum’s existing peer-to-peer components.

Think of it as giving the network Spidey senses for better data availability.

How This Changes Things for You?

The Pectra upgrade will enhance Ethereum's efficiency, making Layer 2 solutions even faster and more cost-effective.

By improving scalability and reducing gas fees, it will allow these Layer 2 technologies to handle more transactions with greater security and efficiency.

So which Layer 2 scaling solutions should you be eyeing 👀 

We got you covered 👇️ 

ETH LAYER 2s

ARBITRUM

Arbitrum is like a turbocharger for Ethereum, making transactions faster and cheaper. It processes multiple transactions off-chain, then sends a summary back to Ethereum.

So how does it work?

Optimistic Rollups

Arbitrum uses a technology called Optimistic Rollups, which allows smart contracts to work faster by shifting some tasks to Arbitrum. Transactions happen on Arbitrum, and only the final results are saved on Ethereum, speeding up the process and reducing costs.

These rollups are "optimistic" because they assume all transactions are valid unless proven otherwise. Anyone can check and report any issues.

By confirming multiple transactions at once, Arbitrum ensures quick processing.

Advantages

• Compatibility: Arbitrum works seamlessly with Ethereum, making it easy for developers to create and run applications with minimal adjustments.

• Speed: Arbitrum processes many transactions quickly, perfect for gaming, NFTs, and DeFi, offering users faster transactions and lower fees.

• Governance: The ARB token allows the community to participate in decision-making about the network, including voting on proposals and fee changes.

• Security: Arbitrum is secure as long as at least one person is honest. If someone tries to cheat, they lose their stake (the money they put up).

TECHNICAL ANALYSIS

Arbitrum Tokenomics

ARB is Arbitrum’s token, it’s used for governance and incentivizing participants within the Arbitrum ecosystem.

• Initial Supply: The maximum ARB token supply is 10 billion tokens.

• Inflation Rate: The token has a maximum yearly inflation rate of 2%, allowing for a gradual increase in supply over time.

• Distribution: Here’s how the ARB tokens are distributed:

Invest Now?

The market’s recent downtrend has shifted with the Ethereum ETF approval, benefiting Layer 2 solutions like Arbitrum (ARB).

Looking at the Weekly Chart, ARB has seen a significant retracement from its all-time highs. It was down 64% before the ETF news but recovered 32% last week and continues to trend higher.

Zooming in on the daily chart, we can identify ideal entry points to take advantage of this move.

The daily chart indicates 3 key areas for a potential entry:

• Accumulation Zone: $1.2354 - $1.0737

• Highest Trading Volume: $1.1

• Wyckoff Check: $1.06

These overlapping areas suggest a strong zone to place an order. We are looking to accumulate ARB at $1.1.

FEEDBACK

We hope you enjoyed today’s newsletter. ARB is definitely a strong and industry-leading Layer 2 that we’ve supported since its inception. Don’t be surprised to see ARB make it to the top 50 biggest cryptocurrencies at the next market peak.

We’d love to hear your feedback—it truly helps us improve. Let us know what topics you want us to cover, or if you’d like us to dive deeper into your favorite altcoins. Don’t hesitate to leave a comment!