Wednesday, 13 April 2022

Market Summary

Market Summary 13 April 2022

Bitcoin Price: US$ 40,074.94 (+1.38 %)
Ethereum Price: US$ 3,027.66 (+1.61%)


A Token for Multisigs, and Astroport’s Council Assembles

  • Astroport announces deploying its governance contract and the inception of the Astral Assembly.
  • Merit Circle publishes an article on their studio, presenting some of their goals and hinting at further developments.
  • Polygon DAO announces Polygon Village. The Village is a full-stack ecosystem to support projects launching on their chain, including welcome vouchers, grants, accelerator programs, and job boards.
  • Reflex completes their first “ungovernance” step, beginning their journey to being autonomous.
  • Anchor recently passed a proposal that would end their ANC airdrops. According to the proposal, the airdrops increased ANC token emissions, which led to downward price pressure. The remaining 74m ANC Anchor allocated to airdrops will be re-allocated to the community pool.
  • Token holders at Goldfinch have decided to award early borrowers with a retroactive airdrop. The airdrop will consist of .857% of the total GFI supply, vesting over two years.
  • Treasure DAO has voted to reduce their SLP rewards from 1m per month to 650k per month. The DAO will stagger the reduction, reaching 650k emissions by July.


veBAL Lockups, Governance House, & ThorChain’s Revival

  • Balancer recently launched the veBAL governance system. VeBAL is a unique ve-derivative where instead of locking BAL tokens, holders can lock up LP or Balancer Pool Tokens (BPT) to receive veBAL. More specifically, they need to lock their BPT in the 80BAL/20WETH pool (80% BAL Tokens paired with 20% WETH Tokens).
  • Having these BPT tokens locked will create liquidity depth for BAL as more of its BPTs are taken out of circulation. VeBAL can be locked for a duration of 1 week up to 1 year. This is a sharp contrast to Curve’s veCRV max lock of 4 years.
  • Within two weeks of its introduction, 30% of BPTs (80BAL/20WETH pool) are now locked and have boosted the supply of BPTs from 2.82M to 3.11M representing a 9.3% increase.
  • However, this means that BAL token holders will not receive voting power unless they deposit into the BPT pool, which subjects veBAL holders to impermanent loss. To counteract I.L. and token dilution from emissions, 10% of liquidity rewards will be allocated to the veBAL gauge.
  • On top of the liquidity incentives, veBAL holders are also allocated 75% of all protocol revenue. In addition, they will start and distribute liquidity mining rewards on Ethereum Mainnet (56% of rewards), but also on Polygon (16%) and Arbitrum (7%). This will make cross-chain veBAL wars possible and Polygon/Arbitrum native protocols will be able to participate.
  • Since the beginning of March, THORChain has experienced a surge in activity. By the end of the month, both volume and TVL reached a new ATH at $162M and $549M respectively. In this post, we will analyze the three recent milestones which have laid the foundation for THORChain’s recent traction. Namely, they are: the activation of THORSynths, an integration with Terra, and the removal of liquidity caps.
  • Prior to synths, one could think of THORChain as an exchange where users were forced to deposit, swap, and withdraw assets, bearing expensive gas costs each time they wanted to make a trade. With synths, users have the option to deposit and do as many trades as desired on THORChain, while also keeping the option of being able to withdraw native tokens to their chain of choice. Naturally, this is a much cheaper mode of operation and has so far attracted significant traction.
  • Despite 2.5% caps, synth swaps (mint & burns) account for 30% of the total volume across all pools. In other words, synths have been 12x more productive in terms of generating volume compared to regular LP. This was possible because, unlike their native counterparts which live on slow and expensive external chains, synths live on the app-specific THORChain blockchain and thus can be frequently mobilized (for example, 5 second block times on THORChain vs 10 mins on Bitcoin) and cheaply transferred.


NFT avatar startup Genies valued at $1B following Series C funding round

  • Nonfungible token (NFT) startup Genies has secured $150 million in Series C funding at a valuation of $1 billion, making it the latest crypto-focused platform to attain “unicorn” status. 
  • The funding round was led by California-based private equity firm Silver Lake, which manages $88 billion in assets as of 2021, with additional participation from existing investors Tamarack Global, BOND and NEA. Genies said the funding will go towards increasing internal capacity in its engineering department as well as investing in new technologies.
  • Founded in 2017, Genies is an avatar technology company that first set out to target social media and messaging platforms. Now, it’s trying to capitalize on the metaverse, a sort of catch-all phrase for companies looking to bridge the physical and virtual worlds. The platform enables users to create avatars that can be deployed in virtual worlds. Its NFT marketplace, dubbed “The Warehouse,” is built with Dapper Labs.
  • Genies claims to have gained 99% market share for celebrity avatars through official partnerships with Universal Music Group and Warner Music Group.


Polygon commits to going carbon neutral in 2022

  • The Polygon network announced on Tuesday its commitment to going carbon neutral and climate positive this year by releasing their “Green Manifesto: A Smart Contract with Planet Earth.” They also made a $20 million pledge to offset their carbon footprints, and buy extra credits to eventually become carbon negative.
  • Polygon is collaborating with KlimaDAO, an organization of developers that provides on-chain carbon offsetting technology as well as Offsetra that provides Polygon with an analysis tool that gauges the network’s carbon intensity. By analyzing emissions from staking node hardware or bridging activities and the energy consumption from interacting with Ethereum Mainnet, the can better form a management strategy.
  • Polygon also published an emissions analysis that found that 99% of Polygon’s emissions are due to checkpointing and bridging activities that involve transactions on Ethereum Mainnet. Polygon cited a total network emissions of 90,645 tonnes CO2e from February 2021 – February 2022, under companies like Microsoft and Deloitte.


Is the surge in OpenSea volume and blue-chip NFT sales an early sign of an NFT bull market?

  • In the last two months, OpenSea began to cool down from its New Year’s bull run and many nonfungible token (NFT) pundits began to speculate about the beginning of a bear market once sales took a slight downward trend after closing out a record-breaking $5 billion in total volume sales in January. 
  • However, for the last seven days, the total sales volume has already exceeded the $1 billion mark and just a week into April, it seems the NFT markets are waking up to a resurgence of blue-chip caliber projects. Cue the “spring awakening.”
  • Traders searching for the next Bored Ape Yacht Club (BAYC) project have patiently waited for another project to come in with the same force and brand equity. Some top contenders have been emerging. Azuki Zen, revealed on Jan. 21, has amassed over $574.6 million in total volume, and RTFKT Studios and Takashi Murakami’s CloneX NFT avatar project has accumulated over $546.7 million. In the last seven days alone, CloneX has increased its total sales volume by over 180%. 


The aftermath of Axie Infinity’s $650M Ronin Bridge hack

  • In late March, Ronin, an Ethereum sidechain built for the popular play-to-earn nonfungible token game Axie Infinity, was hacked for over 173,600 Ether (ETH) and 25.5 million USD Coin (USDC) for a combined value of over $600 million. 
  • The root cause for the exploit could be traced back to last year when Axie DAO gave access to Sky Mavis to sign off on transactions on its behalf to mitigate user volume. However, this access was never revoked, which eventually led to backdoor access by hackers resulting in the $600 million hacks.
  • Sky Mavis had made a similar promise in the aftermath of the exploit, claiming they would ensure that affected users are reimbursed even if the lost funds aren’t recovered. On April 6, the creators of the popular game raised $150 million led by crypto exchange Binance and other investors.
  • The wallet belonging to the hackers of the Ronin Bridge has also started sending funds to currency mixer services such as Tornado Cash. It’s worth noting that the Poly Network exploiter did the same at first but finally decided to return the funds as laundering such a large sum became increasingly difficult. According to a PeckShield report, the hackers laundered about $42 million worth of funds, or around 7.5% of the total.


Bitcoin spikes with stocks as US inflation hits highest since 1981

  • The U.S. CPI was up 8.5% year-on-year and rose 1.2% in March, alone, according to the U.S. Bureau of Labor Statistics.
  • The most in over 40 years, the results showcased the inflationary pressures active throughout the economy and implied that the Federal Reserve had much ground to make up. Criticism of the Fed was everywhere, including from the likes of traditional economists such as Steve Hanke.
  • “U.S. CPI came in at *8.5%* level, which means that inflation is likely already in the double digits,” Gabor Gurbacs, director of digital assets strategy at VanEck, responded. 
  • Bitcoin’s reaction was in line with correlated stock markets, the S&P 500 likewise gaining 1% on the open and Asian markets recovering from previous losses.
  • “Inflation is worse than you think, and Bitcoin is better than you know,” MicroStategy CEO Michael Saylor commented, echoing Gurbacs.


BlackRock joins stablecoin issuer Circle’s $400M funding round

  • Circle, a major peer-to-peer payments firm and the principal operator of the UDC Coin (USDC), has announced a $400 million funding round and a new partnership with the American investment firm BlackRock.
  • The USDC issuer has entered into an agreement for a funding round featuring investors like BlackRock, the investment advisory firm Fidelity Management and Research, the London-based hedge fund Marshall Wace and Fin Capital, as Circle officially announced Tuesday. The investment round is expected to close in the second quarter of 2022.
  • Apart from providing strategic investment and being the primary asset manager of USDC cash reserves, BlackRock has inked a broader strategic cooperation with Circle. The partnership specifically envisions exploring capital market applications for USDC, the announcement notes.
  • The funding aims to promote Circle’s development amid the growing demand for the United States dollar-based digital currency. USDC is one of the fastest-growing dollar digital currencies, reaching $50 billion market capitalization in February 2022 after launching in September 2018.


Wealth report: As old money procrastinates, young money goes crypto

  • The rich get richer. According to the Wealth-X consulting company, in 2020, the number of ultra-high-net-worth individuals worth $5 million–$30 million in the world increased by 1.7% to 295,450 people; the combined net worth of this group increased by 2% to $35.5 trillion.
  • Observing the investment preferences of rich individuals and institutional investors is instructive. They have access to exclusive information and analytics to inform their investment decisions, and their investments are often supported by an army of advisers, employees of family offices and wealth managers.
  • Due to the instability in world politics and high inflation in many parts of the globe, 2021 marked a trend for the wealthy to search for new investment growth points. Traditional assets, on which the fortunes of the establishment are usually based — real estate, securities, deposits — are currently under great pressure. According to economist Ziad Abdelnour, 70% of wealthy families in the United States lose their wealth in the second generation, and 90% lose capital in the third generation.
  • Representatives of “old money” and “new money” tend to have different views on crypto assets. For example, Elon Musk said that apart from the stock in his own companies, Tesla and SpaceX, cryptocurrency is his only major personal investment. Many Millennial millionaires’ main assets are digital.
  • The resistance of representatives of old money and old methods of money management to crypto is gradually weakening. The crypto industry is dealing more and more blows to the once-thriving financial machine founded on stocks, bonds and real estate. Today, the futility of ignoring cryptocurrencies is becoming more and more obvious. The statements of Munger and Blankfein, even among like-minded peers, are becoming increasingly perceived as mere grumbling.


Brazilian central bank president confirms CBDC pilot will launch in 2022

  • The president of the Central Bank of Brazil confirmed that the country’s sovereign digital currency pilot will go live this year, Cointelegraph Brazil reported.
  • The confirmation about the digital currency came during an event on Monday, where Roberto Campos Neto, the president of the Central Bank of Brazil, noted that a pilot CBDC program could go live in the second half of this year.
  • The value of the upcoming CBDC would be pegged against the national fiat payment system STR (Reserve Transfer System). Neto also confirmed that “Digital Real” would have a fixed supply and only a certain amount of it would be minted, quite similar to Bitcoin:
  • “This [using the STR in Real Digital] is a way of creating the digitalization of the currency without creating a rupture in the banks’ balance sheets. This project should have some kind of pilot in the second half of the year.”


Leading centralized exchanges extend market share in 2022

  • The top centralized cryptocurrency exchanges have reached all-time highs for market share this year as the trading volume in crypto consolidates onto the platforms of only a few trusted companies.
  • A total of 78 exchanges received a “top tier” grade, with Coinbase, Gemini, Bitstamp and Binance as the only four to receive the highest AA grading.
  • The report revealed that top-tier exchanges traded a total of $1.5 trillion in February 2022 compared with $62 billion in the “lower-tier” exchanges. CryptoCompare claims that this metric shows “both retail and professional traders are moving to lower risk exchanges.”


Animoca drives into crypto racing games with latest acquisition

  • Gaming and venture capital firm Animoca Brands has completed its landmark acquisition of Eden Games, publishers of the Gear.Club, the Test Drive series and other popular racing games.
  • Eden Games is a France-based firm that was founded in 1998. Engine Gaming and Media sold its 96% stake in the company to Animoca for $15.3 million last Thursday.
  • With the acquisition, Animoca plans to enhance its REVV Motorsport (REVV) ecosystem by taking a “Metaverse first approach” to new and existing gaming titles, as tweeted by Animoca chairman Yat Siu on Tuesday.
  • It also hopes to introduce new blockchain-based racing games. Eden Games has partnerships within the automotive industry with the likes of BMW, Bugatti, Porsche and others, which should help Animoca build out a more robust suite of games for racing game aficionados.

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