GM. This is Milk Road. We cut the crust off your crypto sandwich (good bits only).

Here’s what we got for you today:

• ✍️ Is PayPal quietly trying to become a crypto super app?

• ✍️ Inflation down (yew!), Yen strong (boo!)

• 🎙️ The Milk Road Show: What Everyone Is Getting Wrong About Ethereum & Solana Right Now w/ Kyle Reidhead

• 🍪 Indonesian crypto exchange Indodax after $22M hack

IS PAYPAL QUIETLY TRYING TO BECOME A CRYPTO SUPER APP? 🧐

Remember that time you slowly raised the height of all your furniture to convince your little brother he was shrinking?

(No? Just us then. Cool cool cool).

Well, the point we’re trying to make is: some goals require you to play the long game.

And the more we see coming from PayPal, the more we’re convinced they’re taking a similar approach to carving out a dominant edge in crypto.

Here’re three parts of the larger picture we’re beginning to see:

1/ .eth addresses are coming to PayPal/Venmo

This means PayPal and Venmo’s US-based users (278.10M and 77.7M) will now be able to send platform supported Ethereum-based tokens to ENS addresses. 

(e.g. coolguy69.eth, instead of  0xb794f5ea0ba39494ce839613fffba74279579268)

Side note: That’s a huge number of new potential users considering Ethereum had a total of 13.8M active addresses in August (not all of which represent individual users)!

2/ PayPal is growing its $PYUSD stablecoin, fast!

$PYUSD recently peaked at a $1B+ market cap – just 383 days after launch!

While damn-near flipping $USDT’s supply on Solana ($USDT is the largest stablecoin in the crypto space). 👇

3/ Enabling ‘crypto at checkout’ for US-based merchants/consumers

For U.S. customers looking to spend their crypto gains online, PayPal is there with a silky smooth assist – allowing them to pay with crypto across their network of 10.9M US-based online merchants.

Customers simply click ‘Pay with PayPal’ at checkout → select the token they want to spend → then PayPal quietly converts it into fiat → and pays the merchant in USD.

Ok…but why – what’s in it for PayPal?

Short answer: money.

Long answer: LOTS of money.

By making their users’ transition to crypto as easy as possible (through apps they already use), while quietly installing $PYUSD as the backbone of the system – PayPal and Venmo can make… 

counts fingers a metric sh*t ton of cash. 💰️

Don’t believe us? Check this out:

BlackRock made its profits by managing $10T worth of assets.

Tether pulled in its profits by managing $91.69B asset ($USDT).

(The opportunity is clear: build a dominant stablecoin → print cash).

…but PayPal’s strongest potential move is still yet to come.

Right now, the regulatory space in the US is murky to say the least – which means offering yield on stablecoins and crypto assets is a risk. 😶‍🌫️

Some companies, like Coinbase, are willing to take that risk – others, like PayPal, are not.

(At least not yet).

If/when greater regulatory clarity is brought to the U.S. digital asset space, PayPal will have a massive opportunity to sweep up users.

Offering 5%+ yield to all US-based PayPal and Venmo users that keep their money in $PYUSD would incentivize customers and merchants to hold their funds on each respective platform.

(God knows they’re not going to get those kinds of rates from a bank!)

All of which will allow PayPal & Venmo to convert parts of their combined 355.8M user base into $PYUSD holders, competing with $USDT’s 6M total token holders in the process.

Long game: initiated. 🔥 

INFLATION DOWN (YEW!), YEN STRONG (BOO!) 🙃

1/ Inflation prints are in! Here’s what we’re looking at…

CPI fell to 2.5%, while Core CPI remained steady! 🎉

As we mentioned on Monday, Core Inflation is the Feds metric of choice when making rate cut decisions. 

Year-on-year we we’re good! Month-on-month we missed…

So how will that affect potential rate cuts on Sept.18?

It’ll most likely mean we get a cut of 25 bps, instead of 50 bps – which is what we were factoring in either way – so, all's well that ends well.

2/ Uh-oh, the Yen is strengthening again…

Remember when the market crashed in early August? 

That happened after the Yen carry trade unwound. 

Basically, the Yen grew in value, increasing the cost of Yen-denominated loans, which led to a whole bunch of people selling their investments to pay off their Yen-based debts.

The good and bad of all of this is that with lower inflation we’ll get the green light for rate cuts (yew!). 🟢 

But if Japan is raising (or now holding) rates at the same time – it means the Yen gets stronger against the US dollar, which puts further pressure on the Yen carry trade (boo!).

...you feel that – that pang of anxiety? 

Time to apply what we learnt in yesterday’s lead up to the presidential debates:

Zoom out → zen out.

Uncertainty will drive short term market chop, but on a longer time frame: 

We’re still in an uptrend. 🧘

WHAT EVERYONE IS GETTING WRONG ABOUT ETHEREUM & SOLANA 🎙

How do you value L1 blockchains in the near and long term?

Easy question to ask. Hard question to answer.

But that’s exactly what we cover in today’s episode of The Milk Road Show. 

In this episode, Kyle Reidhead joins us to help break down:

• Why overestimating the importance of fee revenue on L1s is a losing game 👎

• How L1s can achieve success with low fee revenue 🏆

• The key factors in valuing L1s 🔑

Get the full 32 mins and 9 secs of insight piped straight to your ears by clicking below 👇

YouTube | Spotify | Apple Podcasts

BITE-SIZED COOKIES FOR THE ROAD 🍪

Super OETH offers DeFi users a seamless way to earn both staking rewards and Layer 2 incentives. Maximize your LST yield with Super OETH, which has earned over 13.1% APY since inception. *

Caroline Ellison has requested the court to redact the names of her supporters ahead of her sentencing on September 24. The move comes out of concerns for their privacy due to possible doxxing and harassment.

Indonesian crypto exchange Indodax has suspended operations after a $22M hack targeting its hot wallets. North Korean hacker group Lazarus is suspected to be behind the breach​.

A solo Bitcoin miner successfully mined an entire block, earning a $181,000 reward. This rare win comes as large mining pools dominate the Bitcoin network​.

Join forces with the Milk Man! We’re looking for a Twitter Specialist + Content Creator who can mix crypto knowledge with top-notch tweets. Think you’re the one? Apply today and let’s get this show on the road!

*this is sponsored content

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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.