May Update

📈 Market Update: Things Are Looking Up?

The market seems to have bounced back from the lows caused by the Trump tariff news, with positive or flat monthly closes for major tokens and stock market indices. Crypto led the recovery, with some people wondering if crypto really was decoupling from the stock market this time. Only time will tell. I doubt we’d see a strong crypto rally while the stock market plummets, but currently we’re all in a “wait and see” holding pattern. I remain cautiously optimistic, hopeful that we just saw a mid-cycle correction, and the bull cycle will continue into Q3, in line with the timing of previous 4-year cycles. That said, at H2O Nodes we’re already building up cash (selling tokens) to prepare for an extended bear market, and staying timing-agnostic (DCAing out of the market).

✈️ That’s a Wrap:
Solana Crossroads, Staking Summit & Sui Basecamp

Yesterday evening I returned from 1.5 weeks in Istanbul + Dubai for Solana Crossroads, Staking Summit, and Sui Basecamp. It was great to meet old friends and colleagues, while also meeting some for the first time (especially on the Sui side!) Overall, the vibes were good, although I have a feeling that these are the “good times” for Solana validators, as the writing is clearly on the wall that issuance will be reduced, and block rewards will be shared more widely with staking pools and stakers. However, as ever, there is opportunity in the market for those smart enough to seize it. Which leads me to the next topic:

🌎 Solana Hackathon Participation

After years of lurking in the Berlin Build Station during previous Solana hackathons, I am excited to finally participate in one - the current Solana Colosseum hackathon, named “Breakout”. We’ve teamed up with two developers and our favorite designer, aiming to complete an MVP by the end of the hackathon on May 16th. The product is simple: it offers Solana stakers two tokens, to which the yields from MEV and issuance will flow, respectively. This allows stakers to sell the token they don’t want, and go “all in” on a single source of yield. MEV yield earners will have direct exposure to the level of activity on the chain, while issuance yield earners will have a very stable source of yield. The opens the door for possibilities of yield trading, hedging, and fixing rates. More to come! If you are interested, check out the (still rough) documentation and let me know your feedback!

🛠️ Ika Fundraise & Testnet 2

Last week, we kicked off the 2nd testnet of Ika, an MPC platform built on Sui whose first testnet we participated in last year. Eager to strengthen our relationship with the Sui ecosystem, we also participated in their recent fund raise, alongside the Sui Foundation. Having participated in the launch of Walrus mainnet in late March, we’re looking forward to supporting another strong Sui ecosystem project with  validator infrastructure.

🤞 Ethereum’s Pectra Upgrade

Ethereum’s long awaited Pectra upgrade is scheduled for May 7th, prompting node operators to upgrade their clients and cross their fingers. While the upgrade contains many upgrade EIPs, the most well-known one is the ability to create “fat validators” with an effective balance of 2048ETH, instead of a mere 32. However, major staking pools like Lido will probably require several months to implement Pectra and take advantage of its new features.

After the Pectra upgrade effectively crippled the Holesky testnet, there is some leftover apprehension about the activation of the upgrade on mainnet. It’s laudable that the upgrade is being pushed through now, instead of facing endless delays, and we are hoping for a smooth upgrade. This could be a bullish or bearish catalyst for Ethereum, which needs some good news after months of declining sentiment and price.

As always, don’t hesitate to reach out for requests regarding reporting, whitelabel validators or RPC nodes, or anything else we can assist with. (An expanded service offering will soon be visible on an update to our website.)

Sincerely,

-Max Sherwood, H2O Nodes Co-founder

One of the few pictures I took in Dubai. (That’s not even the “downtown”!)
Things are wild there, but was glad to fly home to Berlin after 1.5 weeks away.