🏗️ *Like when a city planner starts with the electrical grid…*

Crypto developers work to scale blockchains as they grow in users *and* in use cases. But the foundation new crypto additions are built on, the base blockchain itself, is called a "layer 1." (The additions are — you guessed it —  [layer 2s](https://sherwoodmedia.com/snacks/newsletters/1lStK6DDLtXoSjK8u403uF/articles/5rZMgT0eYgQgLTGQZAx9US/).)

The price of __[solana](https://robinhood.com/us/en/crypto/SOL/)__ and __[cardano](https://robinhood.com/us/en/crypto/ADA/)__ [slipped 30%](https://fortune.com/crypto/2023/06/11/solano-cardano-and-polygon-plunge-nearly-30-as-big-firms-dump-holdings-after-sec-allegations/) last week after the SEC said in a lawsuit that the cryptos are securities. The coins are associated with layer-1 blockchains (also dubbed solana and cardano), which compete with the __[ethereum](https://robinhood.com/us/en/crypto/ETH/)__ blockchain (aka: "ETH killers").

DEFI(NE)

Heard on the Block: "layer 1"

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__Driving gets surge pricing…__ New York City could [become](https://www.cnn.com/2023/06/10/business/congestion-pricing-new-york-city-transportation/index.html) the first US city to charge congestion tolls, and others could follow to ease traffic troubles. Last month the Federal Highway Administration greenlighted Gotham’s congestion-pricing plan, and yesterday was the final day for public objections. The Biden admin is expected to give final approval soon, which would mean a pricier commute for millions. 

- __Big fees:__ As soon as next spring, drivers heading below 60th Street could face congestion tolls ranging from $9 to $23, depending on peak traffic hours.

- __Small print:__ Cars carrying people with disabilities and emergency vehicles are expected to be exempt. Residents earning under $60K/year may also qualify for a tax credit.

- __FYI:__ The Big Apple’s expected to rake in $1B+/year from the tolls, helping offset billions in losses as fewer people take public transit and splurge on lunch bowls (blame: WFH).

__Feeling extra congested…__ and it’s not spring allergies. Higher fuel prices + more congestion (think: burning gas while stuck in traffic) cost the average commuter almost $900 last year — nearly 3X as much as in 2021. While no American cities have adopted congestion pricing yet, Stockholm, London, Singapore, and others have had it for years. They’ve seen fewer traffic jams — and Stockholm saw fewer asthma attacks because of less pollution. Now traffic-plagued Los Angeles is also considering charging drivers during peak hours.

Congestion worse than spring allergies (Spencer Platt/Getty Images)

__Clearer lanes come at a cost…__ Taxi and ride-hail drivers have condemned congestion tolls, saying they’ll hurt biz and raise fares. The MTA says fare hikes triggered by the new tolls could curb cab and ride-hail demand by 17%. Meanwhile, commuters worry that extra fees could strain their already tight budgets as more employers mandate a return to the office.

NYC could become the first US city with a congestion toll, easing (and adding to) commuting woes

__It wasn’t you — it was us…__ After years of focusing on its direct-to-consumer (D2C) business, __[Nike](https://robinhood.com/us/en/stocks/NKE/)__ is back in retailers’ inboxes asking if they’re free to catch up sometime. The sneaker icon has [expanded](https://www.wsj.com/articles/nike-broke-up-with-retailers-now-its-trying-to-win-them-back-6c0b475c) its wholesale relationships with the likes of __[Macy’s](https://robinhood.com/us/en/stocks/M/)__, __[Foot Locker](https://robinhood.com/us/en/stocks/FL/)__, and DSW parent __[Designer Brands](https://robinhood.com/us/en/stocks/DBI/)__. It’s an about-face from the company’s recent strategy:

- __Split:__ Since 2018, Nike has halved its wholesale business, ditching deals with thousands of small retailers and downsizing distribution to chains like Foot Locker. The shift was part of a profit-pumping attempt to boost D2C sales through Nike sites and stores.

- __Second thoughts:__ In the past two quarters, Nike’s wholesale biz logged impressive growth, outpacing D2C in the fall. Inventory glut and ensuing markdowns hurt profits, making the company further question its D2C focus.

__Rediscovering the intermediary…__ A few years ago, D2C was all the rage. But shifting consumer habits have seen D2C-native brands lean into wholesale deals to boost revenue. After disappointing earnings, __[Allbirds](https://robinhood.com/us/en/stocks/BIRD/)__ announced it would consider expanding deals with partners like __[Nordstrom](https://robinhood.com/us/en/stocks/JWN/)__ and __REI__. __[Adidas](https://robinhood.com/us/en/stocks/ADDYY/)__, struggling with big losses from its Yeezy split, recently said that wholesale would play a larger role in its strategy. __[Peloton](https://robinhood.com/us/en/stocks/PTON/)__ began selling gear on __[Amazon](https://robinhood.com/us/en/stocks/AMZN/)__ and in Dick’s stores last fall. Beyond apparel, __Casper__ mattresses can now be found at __Mattress Warehouse__ and __Glossier__ products are stocked at __Sephora__.

Laces

__Ownership isn’t all it’s chalked up to be…__ The D2C model lets brands own more of their business, control how their products are sold, and glean more info about their customers. But it comes with higher shipping, marketing, labor, and tech costs. For companies chasing profits and presence, maintaining wholesale relationships can take some of the pressure off.

Nike rethinks its direct-to-consumer pivot and repairs relationships with retailers

Heard on the Block: "layer 1"

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