December Update

📈📉 Market Update The 4-Year Cycle, Undefeated

Disclaimer: Not financial advice.

November’s Monthly Closes: BTC: -17.50% , ETH: -22.25% , SOL: -28.68% SUI: -36.67%

I’ve seen some people claiming that the lack of an exponential blow-off top means that the 4-year cycle isn’t true, but I find it hard to argue against the timing that has repeated itself several years in a row. Just look at the chart - it’s clockwork. Besides, our lord and savior Bob Loukas always told us that the cycles are defined by the bottoms, not the tops.

Thankfully at H2O Nodes we’ve prepared for this, having sold almost all of our “bags” already, with a cash buffer to survive the coming 24 months, no matter what the market throws at us. That being said, the significantly reduced price of SUI and block rewards on Solana are squeezing us, especially as we continue to invest in the development of RevTec. Had we been more aggressive, we could have hedged some months of earnings, but that ties up collateral and opens the risk of liquidation on a violent upswing. Hedging is not a long term strategy. And if we learned anything from October 10th, it’s that anything is possible in the crypto derivatives markets.

3️⃣3️⃣ Layer33, Solana’s indieSOL Pool

We’ve recently joined Layer33, a new collective of independent and value contributing validators, committed to keeping Solana decentralized, performant, and secure. 33% of all stake is the goal. It feels good to contribute to a genuine community-driven effort, especially one that is trying to save our business and that of many other Solana validators struggling to stay afloat amidst the rise of centralizing DATs, ETFs, and the recent reduction in support from Solana Foundation.

😈 Monad Mainnet Launch

The launch of Monad mainnet went without a hitch! For a mainnet launch with almost 200 validators, it went surprisingly smooth. Big kudos to Jackson and Silviu at Foundation and all the other operators. For now, our earnings are less than those from SUI, and we hope that MON can grow in price despite the market downturn. We have a dedicated machine on the way, until then we run Monad on our shared hardware resources. In any case, our performance seems to be good. I would like to vibe-code some useful tools for stakers in the coming weeks, perhaps similar to stakeinspector.com, if you have any ideas let me know!

🤖 Developer Services

Still no major updates here, although our research is ongoing into the Sui data product space. We’ve begun to connect with trading-adjacent players, who have expressed interest in pre-confirmation transaction streaming. Maybe we can put something together. More to come. In the mean time, we’re making a clone of our dev.h2o-nodes.com platform for Layer33, who wants to offer RPC and transaction landing services in addition to their stake pool.

🌴 Breakpoint

In two weeks’ time, we’ll be at Breakpoint! I am especially looking forward to the MEV Day and Block Zero mini-conferences. I’ll be giving a short REV landscape talk about Block Zero, which may feel a bit bearish, but I’ll do my best to inject some hopium into the talk and ignite a discussion. I am especially excited for my co-founder Daniel, our RevTec full stack dev Nariman, and our lawyer Taiyo, for whom this will be the first Breakpoint, and the first large crypto conference generally.

All the best,

-Max Sherwood, H2O Nodes Co-founder