Thursday, 16 December 2021

Market Summary

Market Summary 16 December 2021

Bitcoin Price: U$48,864.98  (+1.08%)
Ethereum Price: U$4,019.08 (+4.15%)


Option Skews, Ribbon’s Divergence, & Transactional Traction

  • Implied volatility for near-term options are skewed towards puts, indicating that market participants have concerns, and are either buying protection or speculating that price will deteriorate further. Option expiries slightly further out at the end of the year (Jan. – Feb. 2022) are less skewed, indicating a more neutral price outlook over the mid-term.
  • A key reason short term skews lean bearish could be the upcoming FOMC meeting. Both traditional and crypto markets are expecting a more hawkish fed, and this sentiment has been weighing down on risk assets.
  • A tweet by options exchange Deribit also stated that most option premiums have been from call writing followed by put buying, indicating that investors are generally betting on downside.
  • Opyn and Ribbon account for over half of all on-chain options TVL, and have been growing since Ribbon vaults launched earlier this year.
  • Options protocol Hegic suffered from an onslaught of new competition, with TVL declining over 80% since its peak in Jan. 2021. Over the last few months, it’s continued to lose TVL and market share.
  • Ribbon has traded more than $3B in option volume (notional) from its inception in April. In Ribbon v2, the protocol introduced management and performance fees which accrue to the protocol treasury.
  • Revenue has been increasing as Ribbon added more option vaults and increased deposit limits. The project also plans to expand cross-chain and have just launched on Avalanche today.
  • However, price has been trailing Ribbon’s progress. Ribbon’s governance token, RBN, has been trending down since its TGE in October. This is likely caused by airdrop recipients and liquidity mining participants who offloaded their rewards.
  • There are currently plans to revamp Ribbon’s token economics to a veCRV-like model where token holders who lock their RBN for longer periods get greater governance power, and thus a higher proportion of protocol revenue.
  • Daily transactions on Ethereum have largely stayed range-bound since the middle of this year as a result of constant congestion and exorbitantly high fees.
  • Other EVM-compatible chains such as Fantom and Polygon have experienced periods of high transactions, particularly after incentive programs attracted users to the respective chains. However, the incentives seem to be less attractive now, as daily transactions on both chains are trending downwards as the hype faded.
  • Avalanche is still showing signs of growth with daily transactions in an uptrend over last couple of weeks. It remains to be seen is this activity is sustainable or whether it’ll wind down once Avalanche Rush incentives dry up.


Six senators urge Treasury Secretary to clarify definition of broker in infrastructure law before 2022

  • According to the U.S. lawmakers, the infrastructure law contains an “overly-broad interpretation” of what a broker is and places the reporting burden on individuals who may not have the necessary information to comply.
  • A bipartisan group of U.S. senators have called on Treasury Secretary Janet Yellen to clarify the language in the infrastructure bill signed into law by President Joe Biden around the tax reporting requirements on crypto.
  • In a Tuesday letter, Senators Rob Portman, Mike Crapo, Pat Toomey, Mark Warner, Kyrsten Sinema, and Cynthia Lummis urged Yellen to “provide information or informal guidance” on the definition of “broker” in the recently passed infrastructure law, HR 3684. Under the current wording, people in the crypto space including miners, software developers, transaction validators and node operators are required to report most digital asset transactions worth more than $10,000 to the Internal Revenue Service, or IRS.


Rarible integrates with Tezos blockchain and launches own NFT collection

  • Nonfungible token (NFT) marketplace Rarible officially launched its integration with proof-of-stake blockchain Tezos on Wednesday. This collaboration will allow Rarible to feature Tezos NFTs on its marketplace and support secondary sales of live Tezos projects while enabling users to mint low-fee NFTs.
  • Rarible’s integration with Tezos marks the third layer one blockchain supported by the platform, alongside Ethereum and Flow, Dapper Labs’ blockchain network that powers NBA Top Shot. In Rarible’s effort to build a multi-chain platform to consolidate the NFT space, integrations with Solana and Polygon are next, according to Rarible CEO Alexei Falin, who told Cointelegraph:


Kevin Durant and Rich Kleiman’s Thirty-Five Ventures to create NFT drops with Coinbase

  • On Wednesday, Thirty Five Ventures, a venture capital firm co-founded by NBA star Kevin Durant and sports manager Rich Kleiman, announced a business partnership with Coinbase. Under the agreement, Thirty Five Ventures will work jointly with Coinbase to create nonfungible token, or NFT, drops and storytelling content about NFTs and crypto as well as showcase Coinbase’s recent growth in the sector. According to the announcement, there will also be a philanthropic integration with the Kevin Durant Charity Foundation.


Ethereum mixer Tornado Cash announces new upgrades

  • The development team behind Tornado Cash, an Ethereum-based transaction mixing protocol, announced Wednesday the launch of an upgraded pool, dubbed Nova.
  • Nova, developers wrote in a blog post, is focused on “improving user experience & expanding the protocol functionalities,” per a blog post published that outlines the changes. More broadly, today’s announcement is intended to set the stage for a more significant upgrade, v3, though the timeline for v3 has not yet been made public.
  • Among the new functionalities is the capability to “deposit & withdraw arbitrary amounts of ETH,” positioned as a privacy-boosting change to Tornado. “Up to now, all Tornado Cash pools had one thing in common: users could only deposit and withdraw a fixed amount of a given token within each pool. With the arrival of the Nova pool, this statement will no longer be true.”


Gnosis Safe Multisig Live on Fuse

  • Gnosis Safe smart contracts have been deployed on the Fuse Network blockchain. Now, any project, DAO or even individual user can create a muti-signature wallet on Fuse with no code to streamline and secure treasury and fund management.


1inch integrates with Skynet’s Homescreen

  • The 1inch Network is happy to announce that the 1inch front-end is now deployed to Skynet with full support for Homescreen.
  • With Homescreen, users can load their saved versions of the site to access the 1inch protocol. As a result, there is no central hosting provider and, consequently, no single point of failure. Lately, Web3 and DeFi have been struggling with a solution for properly decentralizing their front-ends, leaving a centralized pain-point in how users can access their decentralized protocols.
  • 1inch, as the first DeFi protocol to deploy to Skynet with Homescreen support, is changing this, acknowledging that users deserve to have control over how they access and interact with DeFi protocols.


Binance partners with Indonesian telco to develop new crypto exchange

  • Major cryptocurrency exchange Binance has partnered with MDI Ventures, PT Telkom Indonesia’s venture capital arm, to establish a crypto exchange platform.
  • According to a joint announcement on Wednesday, the agreement will also seek to broaden blockchain adoption throughout Indonesia, which is home to about 240 million people.
  • To assist with the development of the new exchange platform, Binance will provide asset management infrastructure and technology. The agreement will also seek to increase the application of blockchain technology in Indonesia more broadly.


$33.5 billion worth of ETH ‘trapped’ in largest Ethereum contract

  • The single largest Ethereum contract containing 8,641,954 Ether (ETH) worth $33.5 billion is sitting idle because it cannot be spent or sent.
  • A Twitter user highlighted the Beacon chain contract, claiming it to be the largest Ethereum contract with billions of dollars worth of ETH “trapped” inside it. 
  • The contract in question is an Ethereum 2.0 Beacon Chain staking contract launched in November 2020, and it cannot be spent without a hard fork.


Trader Joe Uses Chainlink Price Feeds to Support Rapid Scaling in Avalanche’s Fast-Growing DeFi Ecosystem

  • Trader Joe integrated Chainlink Price Feeds into Banker Joe to bring high-quality market data to its lending and borrowing platform. Rather than designing, building, and maintaining its own oracle solution, Trader Joe was able to quickly integrate Chainlink Price Feeds for hyper-reliable, decentralized market data. Chainlink Price Feeds feature best-in-class security guarantees as they are run by independent, security-reviewed node operators made up of leading DevOps teams, data providers such as Accuweather and the Associated Press, and enterprises including T-Systems, Swisscom, and LexisNexis. Moreover, Chainlink Price Feeds source volume-weighted data from multiple premium aggregators for comprehensive market coverage during extreme market conditions.

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